KIRAN BABULAL JAIN,MUMBAI vs. THE A O NFAC DELHI, THE A O NFAC DELHI

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ITA 5390/MUM/2024Status: DisposedITAT Mumbai26 November 2024AY 2018-197 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the penalty under Section 272A(1)(d) of the Income-tax Act, 1961, was rightly imposed. The primary issue was the non-compliance with the notice dated 13.12.2019 issued under Section 142(1). The Tribunal found that this notice was issued well before the COVID-19 pandemic and the subsequent lockdown in Maharashtra, providing the assessee with sufficient time to comply. The assessee's claims regarding COVID-19 complications, hospitalization, staff absenteeism, and email issues were not substantiated with any documentary evidence. Specifically, the Tribunal noted that the claimed email address 'ows@india.com' was incorrect, and the notice was sent to 'ows@live.in', which was consistently used by the assessee in their tax filings and appeal memo. The Tribunal also found the claim regarding the demise of the accountant unsubstantiated. The conduct of the assessee was characterized as passive and inactive towards statutory notices. The Tribunal concluded that the assessee failed to furnish any credible material to justify their non-compliance. Therefore, the levy of penalty was upheld, and the appeal was dismissed.

What were the facts?

The assessee, Kiran Babulal Jain, filed an appeal against the penalty order under Section 272A(1)(d) of the Income-tax Act, 1961, for Assessment Year 2018-19. The penalty was imposed by the Assessing Officer (AO) NFAC, Delhi, and upheld by the CIT(A) NFAC, Delhi. The assessment was completed under Section 143(3) on 20.05.2021, determining income at Rs. 41,42,910/-. A notice under Section 142(1) was issued on 13.12.2019, to which the assessee did not comply. The assessee's explanation for non-compliance, citing COVID-19 related issues, lockdown, staff absenteeism, hospitalization, and email account issues, was not supported by documentary evidence. The AO found the reasons for non-compliance not genuine and imposed a penalty of Rs. 10,000/-. The CIT(A) also found that the notice dated 13.12.2019 was issued before the COVID-19 outbreak and lockdown, and the assessee had sufficient time to comply.

What were the issues?

1. Whether the authorities below erred in imposing a penalty of Rs. 10,000/- under Section 272A(1)(d) of the Income-tax Act, 1961, for non-compliance with assessment notices for AY 2018-19. Assessee's Contentions: - The assessee argued that they were prevented from complying with assessment notices due to pre-COVID-19 scares and post-COVID-19 complications, including lockdown, staff absenteeism, hospitalization, and locking of their email account. - The assessee contended that the authorities below erred in giving more importance to the original notice dated 13.12.2019, which was for the original assessment window, without calling for specific details from the assessee who filed a return under Section 44AD. - The assessee claimed that notices were issued during the pandemic (21.02.2020, 03.08.2020, 09.10.2020, and 08.12.2020) when their office area was a containment zone, transport services were unavailable, and staff were absent. The assessee also contracted COVID-19 and was hospitalized. - The assessee further argued that their email address 'ows@india.com' was used for filing returns and was the primary communication address, but 'India.com' discontinued its portal without intimation, causing an information gap. They also mentioned the sudden demise of their part-time accountant. Revenue's Contentions: - The revenue, through the Sr. DR, argued that the penalty was levied for non-compliance with the statutory notice under Section 142(1) issued on 13.12.2019, which was before the COVID-19 outbreak and the first lockdown in March 2020, giving the assessee ample time to comply. - The revenue pointed out that the assessee's claimed email address 'ows@india.com' was incorrect, as the primary email ID on record was 'ows@live.in', to which the notice was issued. This same email ID was used in the ITR for AY 2018-19 and subsequent years, as well as in the appeal memo (Form-35). - The revenue also noted that the screenshots provided by the assessee regarding the email portal issue were not verifiable regarding creation dates, discontinuation dates, or the date the screenshot was taken. - The revenue highlighted that the assessee failed to provide documentary evidence for the death of their accountant or proof of appointment.

Which sections of the Income-tax Act were involved?

Section 272A(1)(d),Section 142(1),Section 143(3),Section 44AD,Section 144

AI-generated summary — verify with the full judgment below

Before: SHRI SANDEEP GOSAIN & SHRI PRABHASH SHANKAR

For Respondent: Shri Hemanshu Joshi (Sr. DR)
Hearing: 26.11.2024Pronounced: 26.11.2024

आदेश की प्रयियलयि अग्रेयिि/Copy of the Order forwarded to :

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