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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 18/06/2024 Date of Order – 20/06/2024
O R D E R PER V. DURGA RAO, J.M.
The present appeal has been filed by the assessee challenging the impugned order dated 18/06/202024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2021–22.
The following grounds of appeal have been raised by the assessee:–
“(1) That the Penalty Notice issued and the Penalty Order passed by the learned Addl./Jt./Dy./Asst. Commission of Income Tax/Income Tax Officer, Income Tax Department, National Faceless Assessment Centre, Delhi u/s. 272A(1)(d) is bad in law and wrong on facts and the learned CIT(A) erred in confirming the same.
DPJ Bidar Chincholi (Annuity) Road Project Pvt. Ltd. ITA no.330/Nag./2022
(2) That the learned AO erred in law and on facts in levying penalty of Rs.10,000/- u/s 272A(1)(d) by holding that the assessee has wilfully and intentionally fails to comply with notice issued u/s 142(1) of the Income Tax Act dated 1-11-2021 and the learned CIT(A) erred in confirming the action of AO. On the facts and circumstances of the case, there was a reasonable cause for not attending the notice u/s 142(1) and the assessee has complied with the notice subsequently and therefore the penalty levied is unjustified and improper. (3) That for any other ground with kind permission of your honour at the time of hearing of appeal.”
In the present case, the Assessing Officer passed penalty order under section 272A(1)(d) of the Income Tax Act, 1961 ("the Act") levying penalty of ` 10,000, on the ground that the assessee has not complied with the notice issued under section 142(1) of the Act. The assessee submitted before the Assessing Officer that he could not comply with the notice due to COVID–19 pandemic and also due to shifting from normal accounting system to digital accounting system.
The learned CIT(A), however, not accepted the explanation of the assessee on the ground that there was a failure on the part of the assessee in not responding to the notice issued under section 142(1) of the Act and confirmed the order passed by the Assessing Officer.
Before us, the learned Authorised Representative (“the learned A.R.”) submitted that when the notice under section 142(1) of the Act was issued, the COVID–19 pandemic was in peak and also at the same time the assessee has shifted from regular accounting system to digital accounting system. Due to oversight, he could not respond to the notice issued under section 142(1) of the Act. He submitted that when it came to be noticed, he immediately
DPJ Bidar Chincholi (Annuity) Road Project Pvt. Ltd. ITA no.330/Nag./2022 filed reply. The mistake committed by the assessee is a bona fide mistake hence no penalty is warranted.
The learned Departmental Representative supported the order passed by the authorities below.
We have heard the rival arguments, perused the material available on record and gone through the orders of the authorities below and considered the explanation of the assessee. We find that the explanation given by the assessee is not disputed by the learned CIT(A). The same explanation has been given by the assessee before us also and there is no reason to disbelieve the explanation given by the assessee for not responding to the notice issued by the Assessing Officer under section 142(1) of the Act. Under these facts and circumstances of the case, we are of the opinion that the penalty is not warranted in the present case. Consequently, penalty levied by the Assessing Officer under section 272A(1)(d) of the Act for ` 10,000, is hereby deleted. Thus, the grounds of appeal raised by the assessee are allowed.
In the result, appeal filed by the assessee is allowed. Order pronounced in the open Court on 20/06/2024