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Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH
Before: DR. BRR Kumar & Shri T.R. Senthil Kumar
Ektalis Gam Patidar Income Tax Officer Development Ward-1, (Exemption) Foundation Vs Ahmedabad Samaj Wadi, B/h Green Ganesha Party Plot, Koba Adalaj Road, Gandhinagar, Gujarat-382421 PAN: AAATE1893R (Respondent) (Appellant) Assessee Represented: Ms. Preyashi Tated, A.R. Revenue Represented: Shri Waghe Prasad Rao, Sr.D.R. Date of hearing : 30-12-2024 Date of pronouncement : 31-12-2024 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
This appeal is filed by the Assessee as against the appellate order dated 03.09.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), confirming the levy of penalty under section 272A(1)(d) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for non- responding to the statutory notice issued u/s. 142(1) of the Act relating to the Assessment Year 2017-18.
A.Y. 2017-18 Page No 2 Ektalis Gam Patidar Devlopment Foundation vs. ITO
Brief facts of the case is that the assessee is Trust engaged in charitable activity of education, relief the poor and duly registered u/s 12AA of the Act with effect from 06-04-2004. For the Asst. Year 2017-18, assessee filed its Return of Income on 26-10-2017 declaring Nil income. The same was processed u/s. 143(1) on 27-02-2018. Later on the basis of information that cash deposit of Rs. 1,18,12,500/- and Rs. 32,31,000/- during demonetization period by the assessee Trust, the assessment was reopened by issuing u/s. 148 notice. The assessee has not responded to the notice and the case was transferred to Faceless assessment. The assessee failed to comply to the notice issued u/s. 142(1) dated 06-02-2022 which has resulted in passing an exparte assessment order taxing the entire cash deposit of Rs.1,50,43,500/- chargeable u/s. 115BBE of the Act.
2.1. The Assessing Office also initiated penalty proceedings u/s. 272A(1)(d) of the Act for non-compliance of the notice. The assessee explained that it has not received any physical notice issued by the Ld. A.O. The assessee explained that it as a Charitable Trust and all the active Trustees are retired Senior Citizens and none of them hold e-mail id. Therefore e-mail id of the Accountant was given to the Department. As the Accountant left the job, he did not inform the Trust regarding the notices issued by the Department. It is thereafter the Trust appointed a new Accountant and then participated in the show cause notice dated 18-02-2022 and sought for adjournment on 25-02-2022, which has resulted in passing an exparte assessment order. Therefore assessee requested not to levy penalty u/s. 273B of the Act, as reasonable cause for the failure on the part of the assessee to reply to the notice. The above explanation was rejected A.Y. 2017-18 Page No 3 Ektalis Gam Patidar Devlopment Foundation vs. ITO and Assessing Officer levied penalty of Rs. 10,000/- u/s. 272A(1)(d) of the Act.
Aggrieved against the same, assessee filed an appeal before Ld. CIT(A) who confirmed the levy of penalty.
Aggrieved against the same, assessee is in appeal before us raising the solitary ground that Ld. CIT(A) erred in upholding penalty levied u/s. 272A(1)(d) of the Act. Ld. Counsel further submitted that as against the quantum order, assessee filed an appeal which is pending before Ld. CIT(A). As against the levy of penalty, the assessee has brought out a reasonable cause for not complying with the notice issued u/s. 142(1) of the Act. Therefore invoking u/s. 273B, no penalty shall be imposed on the assessee who has proved a reasonable cause for the failure on the part of the assessee.
Per contra, Ld. Sr. D.R. appearing for the Revenue supported the order passed by the Lower Authorities and requested to confirm the levy of penalty.
We have given our thoughtful consideration and perused the materials available on record. It is undisputed fact that the assessee failed to comply with the 142(1) notice dated 06-02-2022. When a show cause notice dated 18-02-2022 was received by the assessee by Speed Post and requested for an adjournment on 25-02-2022. Without considering the same, the Assessing Officer passed exparte assessment order. The assessee has clearly made out a case that the 142(1) notice was not received by the Trust, and when the final show cause notice dated 18-02-2022 was served by Speed Post, the A.Y. 2017-18 Page No 4 Ektalis Gam Patidar Devlopment Foundation vs. ITO assessee requested for an adjournment. Since the assessee Trust does not hold any e-mail id on their own, they could not reply to the 142(1) notice dated 06-02-2022.
6.1. Section 273B of the Act clearly prescribes that no penalty shall be imposed on the person or the assessee as the case may be, for any failure referred to in clause (d) of Sub-section (1) of Section 272A of the Act, if the assessee proves that there was a ‘reasonable cause’ for the said failure. It is clearly seen the Lower Authority has not considered this provision of Section 273B of the Act which clearly covers the ‘reasonable cause’ as explained by the assessee. Therefore applying the above Section 273B, the penalty of Rs.10,000/- levied u/s. 272A(1)(d) of the Act is hereby directed to be deleted.
In the result, the appeal filed by the Assessee is allowed.