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Facts
The assessee, a widow and homemaker, failed to respond to notices and attend hearings due to trusting a professional who did not act diligently. This led to a penalty under section 272A(1)(d) of the Income Tax Act. The delay in filing the appeal was attributed to the same professional's negligence. The assessee sought condonation of delay.
Held
The Tribunal condoned the 24-day delay in filing the appeal, acknowledging the assessee's bona fide mistake and lack of understanding of tax matters. It was held that the penalty under section 272A(1)(d) should not be imposed when a reasonable cause for non-compliance is shown.
Key Issues
Whether the penalty levied under section 272A(1)(d) of the Income Tax Act is sustainable in the case of a bona fide mistake by the assessee due to professional negligence, and whether the delay in filing the appeal should be condoned.
Sections Cited
272A(1)(d), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC’’ JAIPUR
Before: Hon’ble SHRI SANDEEP GOSAINvk;dj vihy la-@ITA No. 720/JP/2024
ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 26-02-2024, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2017-18 raising therein following grounds of appeal. 1) The Learned National Faceless Appeal Centre (NFAC), Delhi (Herein referred to as "Learned NFAC (A)") has erred in law and on facts in upholding in upholding the penalty levied in the Penalty Order u/s 272A(1)(d) of the Act passed by the National Faceless Appeal Centre (NFAC), Delhi (Herein referred to as NFAC) and dismissing the appeal, same is bona fide mistake on the part of the appellant.
2 SMT. RUKSHMANI SINGH NATHAWAT 2) The Hon'ble NFAC (A) has erred in law and on facts in not deciding the issue on merits and upheld the order of the Ld. NFAC who had erred in levying penalty of Rs.30,000/- u/s 272A(1) (d) of the Income Tax Act, 1961 without appreciating the fact that the no response to Notice u/s 142(1) is bona fide mistake on the part of the appellant, which is unjustified, unwarranted and excessive.
The Hon'ble NFAC (A) has erred in law and on facts in upholding the penalty u/s 272A(1)(d) of the Act on addition made by the AO in the assessment order in respect of cash deposited during demonetization of Rs.12,00,000/- added to the total income of appellant without appreciating the fact that the amount deposited is nominal and does not involve concealment or furnishing of inaccurate particulars of income with the intention to evade taxes.’’ 2.1 At the very outset of the hearing, it is noticed that there is delay of 24 days in filing the present appeal. In this regard, the assessee moved an application dated 20-05-2024 alongwith affidavit for seeking condonation of delay. It was submitted by the ld. AR of the assessee that the assessee being a widow and home maker does not understand the legal mater and therefore, she hired a professional to file an appeal. The assessee had acted in good faith by trusting the professional that he would be doing needful on behalf of the assesse. However, the said professional did not appear nor filed any reply during the hearing before the lower authorities. Therefore, in such a situation penalty u/s 272A(1)(d) of the Act was levied upon the assessee and subsequently confirmed by the ld. CIT(A). It was further submitted that the assessee was not aware that she was required to keep reminding the professional and to keep a check on the income tax portal at regular interval.
3 SMT. RUKSHMANI SINGH NATHAWAT Therefore, under these circumstances, the assessee could not attend the notices issued by the Department. 2.2 On the contrary, the ld DR supported the order passed by the Revenue Authorities and submitted that the assessee has no sufficient cause for seeking of condonation of delay. 2.3 The Bench has heard both the parties and perused the materials available on record and the judgement cited by the respective parties and also the orders of the lower authorities. From the records, it is found that the assessee is a widow and home maker and in support of her contention, she has filed an affidavit wherein it has been specifically mentioned that the assessee does not understand the legal matter and therefore she acted in good faith by trusting the professional to whom she engaged for this task and he would be doing needful on behalf of the assesse. From the entirety of the facts and circumstances, it is found that the assessee had no sufficient knowledge / information regarding tax matters and being a widow and home maker as well as lay person had absolutely trusted and relied upon the professional who in turn had not acted diligently in the case of the assessee. She had to suffer because of the lapse on the part of the professional. Therefore, keeping in view my above discussion and also keeping in view the settled proposition laid down by the Hon’ble Supreme Court in the case of Collector, land 4 SMT. RUKSHMANI SINGH NATHAWAT Acquisition vs. MSt. Katiji and Others, 167 ITR 471 (SC), the delay of 24 days is condoned. 3.1 Now coming to the merits of the present appeal, it is noticed that order imposing penalty u/s 272A(1)(d) has been passed and upheld against the assesee. In this regard, the assessee had already put forth her submission in detail which is also part and parcel of the application for seeking condonation of delay wherein it has been mentioned that the assessee had hired the services of professional and she acted in good faith by trusting upon the said professional that he would be doing needful but the said professional did not appear and not even filed reply and attended on behalf of the assessee. It is an undisputed fact that the assessee is a Widow and home maker and she was not aware of this fact as well as legal matters and also she was required to keep reminding the professional and to keep check on the IT Portal at regular intervals. Therefore, under such circumstances she could not attend the notices issued by the Department. Therefore, considering the above submissions which has not been rebutted by the ld.DR except by submitting that the assessee has not intentionally appeared before the lower authorities and it being a peculiar facts and circumstances of the case, I am of the view that penalty u/s 272A(1)(d) of the Income Tax Act should not be imposed if a reasonable cause for non-compliance of statutory notice is presented. The Bench rely upon the decision of ITAT Delhi Bench in the case of Maqsood Ali vs ITO (ITA No. 1376/Del/2023 5 ITA NO. 720/JP/2024 SMT. RUKSHMANI SINGH NATHAWAT dated 21-06-2023 wherein it is held that the penalties u/s 272A(1)(d) of the Income Tax Act should not be imposed if a reasonable cause for non-compliance of statutory notice is presented. The Bench further rely on the decision of ITAT Mumbai Bench in the case of Triumph International Finance India Ltd. vs DCIT (ITA No. 1870/Mum/2020 dated 10-03-2022) wherein it has been held that as assessee has not been able to show reasonable cause for failure to comply with the statutory notices u/s 142(1) of the Act. Thus in my view, the penalty levied u/s 272A(1)(d) of the Act is unsustainable. The Assessing Officer is directed to delete the penalty. Hence, considering the totality of the facts of the case and the case laws cited (supra), the Bench feels that the penalty levied upon the assessee stands deleted and the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed with no order as to costs. 4.0 Order pronounced in the open court on 12/08/2024.