“cancellation of penalty”
The decision most relied on for cancellation of penalty is Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust v. ADIT (115 TTJ 419), cited in 292 judgments on BharatTax.
Leading authorities on cancellation of penalty
Penalty under Section 272A(1)(d) for non-compliance with a notice issued under Section 142(1) is not leviable when the assessee demonstrates a reasonable cause for such non-compliance. The decision defines what constitutes 'reasonable cause' in this context.
When the addition made in the assessment order, on the basis of which a penalty for concealment under section 271(1)(c) is levied, is subsequently deleted, the penalty has no basis and must be cancelled.
A penalty for concealment of income cannot be levied if an assessee files a revised return to buy peace and avoid litigation, and the revenue accepts this without objection.
Penalties levied under Section 271D for contravention of Section 269SS may be cancelled. This applies particularly when transactions, such as salary or rent adjustments made through journal entries, do not involve actual cash receipts or payments.
Penalty under Section 271D is justified if the assessee fails to show reasonable cause for non-compliance with Section 269SS, and Section 273B can be applied to cancel the penalty if reasonable cause is established.
