DEVASAKAYAM AANGILAPPALLIPARIPALANA SABAI ,MADURAI vs. ITO, EXEMPTIONS WARD, MADURAI

This appeal filed by the assessee is directed against the order dated 03.01.2024 passed by the ld. CIT(A) [NFAC], Delhi for the assessment year 2013-14.

The assessee has raised 7 grounds of appeal amongst which, the only effective issue arises for our consideration is to whether the ld. CIT(A) was justified in confirming the penalty imposed by the Assessing Officer under section 271(1)(b) of the Income Tax Act, 1961 [“Act” in short].

The ld. AR Shri G. Akash, Advocate drew our attention to page 3 of paper book and submits that the assessee responded to the notice dated 28.06.2021 and argued that the assessee sought time to comply with the notice as the notice under section 148 of the Act was not available in their website portal file. He submits that the findings of the Assessing Officer in respect of non-compliance to first notice dated 28.06.2021 is incorrect. Further, he drew our attention to page 8 of the paper book and argued that the assessee was not aware of notice issued under section 148 of the Act as the notice is not available in the e-proceeding of the income tax website. He submits that the facility was not enabled in the website at that time and even long afterwards. The ld. AR submits that the assessee fully complied with the notice issued under section 142(1) of the Act and the penalty imposed by the Assessing Officer is not justified.

According to the ld. DR Shri AR V Sreenivasan, Addl. CIT, the assessee failed to comply with notice under section 148 of the Act in not filing the return of income and for non-compliance thereafter in response to notice under section 142(1) of the Act, the Assessing Officer was justified in imposing penalty. He drew our attention to page 1 of the paper book and further by referring to Annexure at page 2 and submits that since there was no compliance by the assessee, the Assessing Officer rightly proceeded to complete the assessment under section 144 of the Act. The ld. DR place reliance on the order passed by the ld. CIT(A).

Heard both the parties, perused the material available on record. We note that the Assessing Officer initiated penalty proceedings and imposed penalty under section 271(1)(b) of the Act. On perusal of page 1 of the paper book, we note that the Assessing Officer issued notice dated 28.06.2021 requesting the assessee to furnish as detailed therein [(a) to (e)] on or before 13.07.2021. We note from the “remarks” made by the assessee at page 3 of the paper book, stating clearly that notice under section 148 was not available in the website file verifying the records for filing return of income. Further, the assessee sought time of 10 days for filing the return of income. Therefore, it is clear that the finding of the Assessing Officer for non-compliance of notice under section 142(1) of the Act is incorrect as the e-Proceedings Response Acknowledgement at page 3 clearly shows the compliance to the notice dated 28.06.2021. Further on perusal of page 8 of the paper book, which is in response to the 2nd notice dated 08.02.2022, as well as show cause notice dated 26.03.2022, wherein, it has been clearly mentioned that the assessee has been regularly filing returns of income except for the year under consideration as the notice issued under section 148 of the Act was not available in the IT website, which clearly shows that the assessee has responded to second notice dated 08.02.2022 also wherein it was stated that inspite of its efforts in the IT website, due to technical glitches, the assessee could not take note of the 2nd notice under section 142(1) of the Act dated 08.02.2022. Therefore, it is clear that the assessee complied with the notices dated 28.06.2021 and 08.02.2022. Thus, the penalty imposed by the Assessing Officer and confirmed by the ld. CIT(A) is not justified and accordingly, the penalty levied under section 271(1)(b) of the Act is deleted. Thus, the ground raised by the assessee is allowed.

In the result, the appeal filed by the assessee is allowed. Order pronounced on 12th June, 2024 at Chennai.