A Z DEVELOPERS,HYDERABAD V. ITO., WARD-14(1), HYDERABAD

ITA 899/HYD/2024

AI Insights

The case involves M/s. A Z Developers, who appealed against the penalty imposed by the Income Tax Officer, Ward-14(1), Hyderabad, for non-compliance with notices during reassessment proceedings under Section 147 of the Income Tax Act, 1961. The penalties were contested on the grounds that the non-compliance was due to the COVID-19 pandemic, during which the Supreme Court had extended the limitation period for legal proceedings. The Tribunal accepted the assessee's argument that the pandemic created genuine difficulties, thus justifying the delay in compliance and leading to the deletion of the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472541 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P. MURALI MOHAN RAO
• Keywords: Reasonable cause; Reassessment proceedings; Period of limitation; Time period of passing order
• Section: 147; 142(1); 273B

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad BEFORE SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.899/Hyd/2024 (निर्धारण वर्ा/Assessment Year:2016-17) M/s. A Z Developers, Hyderabad. PAN:AAOFA9411F Vs. Income Tax Officer, Ward-14(1), Hyderabad. (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri P. Murali Mohan Rao,C.A. रधजस्‍ व द्वधरध/Revenue by:: Dr. Sachin Kumar, SR-DR सुिवधई की तधरीख/Date of hearing: 18/02/2025 घोर्णध की तधरीख/Pronouncement: 24/02/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.: This appeal is filed by M/s. A Z Developers (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 21.08.2024 for the A.Y. 2016-17. 2. The brief facts of the case are that the assessee was subjected to reassessment proceedings u/s 147 of the Income Tax Act,1961 (“the Act”). During the course of the proceedings, the learned Assessing Officer (“Ld. AO”) issued notices u/s 142(1) of the Act dated 22/12/2021, 17/01/2022 and 17/02/2022 to the assessee, to which the assessee could not respond. Consequently, the Ld. AO initiated penalty proceedings under Section 271(1)(b) of ITA No.899/Hyd/2024 2 the Act and levied a penalty of Rs.30,000/- by order dated 21.09.2022. The Ld. CIT(A) upheld the penalty, leading to the present appeal before us. 3. The Ld. AR submitted that, the non-compliance with the notices issued by the Ld. AO was due to the exceptional circumstances prevailing during the COVID-19 pandemic. It was contended that the notices were issued within the period covered under the suo motu order of the Hon’ble Supreme Court in Miscellaneous Application No. 21 of 2022, dated 10.01.2022, wherein the Hon’ble Apex Court extended the limitation period for all proceedings falling between 15.03.2020 and 28.02.2022, and further granted a grace period of 90 days from 01.03.2022. 4. The Ld. AR further submitted that, since the notices issued by the Ld. AO fell within this period, the delay in compliance should be condoned as per the relaxation provided by the Hon’ble Supreme Court. It was further contended that the default was neither willful nor intentional but was caused by the genuine difficulties faced during the pandemic. 5. On the other hand, the Learned Departmental Representative (“Ld. DR”) supported the orders of the lower authorities, contending that the assessee failed to comply with the notices without any justifiable reason. 6. We have carefully considered the rival submissions and perused the material on record. The Hon’ble Supreme Court, in its suo motu proceedings (MA No. 21/2022 dated 10.01.2022), has categorically held that any limitation period expiring between ITA No.899/Hyd/2024 3 15.03.2020 and 28.02.2022 would be extended, and all persons would have a limitation period of 90 days from 01.03.2022. In the present case, the notices issued by the AO, to which the assessee could not respond, fall within the extended period granted by the Hon’ble Supreme Court. 7. Considering the unprecedented situation caused by the COVID-19 pandemic and the relief granted by the Hon’ble Supreme Court, we are of the view that the assessee had a reasonable cause under Section 273B of the Act for the non- compliance with the notices. The imposition of penalty under Section 271(1)(b), which requires willful default, is therefore not justified in the present case. Accordingly, we delete the penalty of Rs.30,000/- imposed under Section 271(1)(b) of the Act. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 24th Feb., 2025. Sd/- Sd/- (K. NARASIMHA CHARY) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad. Dated: 24.02.2025. * Reddy gp Copy of the Order forwarded to : 1. M/s. A Z Developers, C/o P. Murali & Co., C.As, 6-3-655/2/3, Somajiguda, Hyderabad-500082 ITA No.899/Hyd/2024 4 2. ITO, Ward 14(1), Hyderabad. 3. Pr.CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file. BY ORDER, "