JAIRAJ SINGH SOLANKI,JAIPUR vs. ITO WARD 2(4), JAIPUR, JAIPUR

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ITA 153/JPR/2024Status: DisposedITAT Jaipur28 March 2024AY 2017-185 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee deserves immunity from the levy of penalty under Section 273B of the Act. The penalty of Rs. 10,000/- was levied under Section 272A(1)(d) for non-compliance with the notice under Section 142(1) dated 03.12.2019. While the assessee had filed certain details online on 10.06.2019 and 02.07.2019, it was an admitted fact that he had not appeared on one occasion. The reason provided for non-appearance was the assessee's unawareness of the hearing date fixed by the notice dated 03.12.2019. Considering that the assessee is a taxi driver, works regularly for his livelihood, and is not well-educated, it was plausible that he failed to appear without any mens rea, especially given the technicalities of e-proceedings. The Tribunal found that the assessee had a reasonable cause for the failure. Therefore, the finding of the CIT(A) was set aside, and the impugned penalty was deleted. The operative direction was the deletion of the penalty.

What were the facts?

The assessee, Jairaj Singh Solanki, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Jaipur Bench, against an order dated 24.01.2024 passed by the CIT(A)/NFAC, Delhi. This order confirmed a penalty of Rs. 10,000/- levied by the Assessing Officer (AO) under Section 272A(1)(d) of the Income Tax Act, 1961. The penalty was imposed for non-compliance with a notice issued under Section 142(1) of the Act for the Assessment Year 2017-18. The assessee, a taxi driver and illiterate, had filed his return of income on 15.08.2017. The case was selected for limited scrutiny due to credit card payments. Notices under Sections 143(2) and 142(1) were served. The AO alleged failure to appear for a final show cause notice dated 03.12.2019.

What were the issues?

1. Whether the penalty of Rs. 10,000/- levied under Section 272A(1)(d) of the Income Tax Act, 1961, for non-compliance with a notice under Section 142(1) is sustainable, considering the assessee's circumstances and the provisions of Section 273B of the Act? (Question of law and fact) Assessee's Contentions: The assessee argued that he is an illiterate taxi driver who earns his livelihood by working regularly. He had furnished his return of income and responded on two occasions during the assessment proceedings, though his submissions were not considered. He was unaware of the show cause notice dated 03.12.2019, for which the penalty was levied, and therefore, prayed for immunity from penalty under Section 273B of the Act due to reasonable cause. The assessee relied on Section 273B. Revenue's Contentions: The Departmental Representative vehemently supported the order of the CIT(A). No specific authorities or precedents were mentioned by the revenue.

Which sections of the Income-tax Act were involved?

Section 272A(1)(d),Section 142(1),Section 273B,Section 143(2),Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR

Before: SHRI MANISH BORAD, AM & DR. S. SEETHALAKSHMI, JM

For Appellant: Shri Shrawan Kumar Gupta (Adv.)
For Respondent: Smt. Monisha Choudhary (Addl.CIT)
Hearing: 27/03/2024Pronounced: 28/03/2024

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Jh euh"k cksjkM] ys[kk lnL; ,oa Mk0 ,l- lhrky{eh] U;kf;d lnL; ds le{k BEFORE: SHRI MANISH BORAD, AM & DR. S. SEETHALAKSHMI, JM vk;dj vihy la-@ fu/kZkj.k o"kZ@Assessment Years : 2017-18 Jairaj Singh Solanki cuke ITO Vs. 5/63, SFS, Agrawal Farm, Ward-2(4), Jaipur. Mansarowar, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AWCPS8587N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Shrawan Kumar Gupta (Adv.) jktLo dh vksj ls@ Revenue by : Smt. Monisha Choudhary (Addl.CIT) a lquokbZ dh rkjh[k@ Date of Hearing : 27/03/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 28/03/2024 vkns'k@ ORDER PER: MANISH BORAD, AM This appeal is filed by the assessee aggrieved from the order of the ld. CIT(A), National Faceless Appeal Centre, Delhi dated 24.01.2024 [Here in after referred as “CIT(A)/NFAC”] for the assessment year 2017-18, which in turn arise from the order dated 05.08.2021passed under section 272A(1(d) of the Income Tax Act, [Here in after referred as “Act” ] by the AO.

2.

Sole grievance of the assessee raised in the grounds of Jairaj Singh Solanki vs. ITO appeal is against the levy of penalty of Rs. 10,000/- u/s 272A(1)(d) of the Act levied by the Assessing Officer for not complying to the notice u/s 142(1) of the Act.

3.

At the outset, ld. AR of the assessee submitted that the assessee earns his living by working as a taxi driver and he is an illiterate person. The assessee had furnished the return of income on 15.08.2017 declaring income of Rs. 2,50,040/- and during the course of limited scrutiny proceedings, the assessee has responded on two occasions but his submission has not been considered. However, the penalty has been levied for not complying with another show cause notice for which the assessee was not at all aware and thus prayed that the assessee deserves immunity from levy of penalty by virtue of section 273B of the Act.

4.

On the other hand, Departmental Representative vehemently supported the order of the ld. CIT(A).

5.

We have heard the rival contentions, perused the material placed on record before us. The penalty of Rs. 10,000/- has been levied u/s 272A(1)(d) of the Act for non compliance to the notice issued u/s 142(1) of the Act dated 03.12.2019. We observe that assessee filed its return of income u/s 139(1) of the Act for A.Y.

Jairaj Singh Solanki vs. ITO 2017-18 on 15.08.2017 declaring income of Rs. 2,50,040/- and is earning income from running taxi/car hiring business. After the case being selected for limited scrutiny through CASS for the reason of, “credit card payments”, notices u/s 143(2) and 142(1) of the Act during served upon the assessee. The Revenue authorities alleged that the assessee has failed to appear for the final show cause notice issued u/s 142(1) of the Act on 03.12.2019. We however, notice that in the present case the assessee has filed certain details during the assessment proceedings. Our attention was drawn to the various notices by e-proceedings. We find that the assessee filed details online on 10.06.2019 and 02.07.2019 and as alleged by the ld. Counsel for the assessee in its written submission that the ld. AO has not considered these details before completing the assessment proceedings. Therefore, it is an admitted fact that the assessee had made certain compliance by filing the details but on one occasion he has not appeared and for such non appearance the reason mentioned is that the assessee was not aware about the date of hearing fixed by notice dated 03.12.2019. Considering the fact that the assessee is a taxi driver and has to work regularly for earning bread and butter and also the assessee not being well educated and therefore, not aware of Jairaj Singh Solanki vs. ITO the technical charges recently introduced in the Income Tax e- proceedings, it is quite possible that without having any mensrea the assessee failed to appear.

6.

Under these facts and circumstances of the case, in our considered view the assessee deserves immunity from levy of alleged penalty by u/s 273B of the Act, which provides that no penalty shall be impossible for failure referred in the said provisions which includes the alleged failure, if the assessee proves that there was reasonable cause for the said failure. We therefore, observing that the assessee had a reasonable cause for the said failure, set aside the finding of ld. CIT(A) and delete the impugned penalty of Rs. 10,000/- levied u/s 272A(1)(d) of the Act.

7.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open Court on 28/03/2024.

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