BHAGVANDAS HIRACHAND WACHHANI,AHMEDABAD V. ITO,NFAC, DELHI PRESENT JURISDICTION THE ITO, WARD-7(2)(1), AHMEDABAD

ITA 1794/AHD/2024

AI Insights

The case involves Bhagvandas Hirachand Wachhani, the appellant, contesting a penalty imposed by the Income Tax Officer (ITO) for non-compliance with several notices during the assessment year 2017-18. The ITO had added unexplained expenditure to the assessee's income and imposed a penalty of Rs. 30,000 for non-compliance with four notices. The Commissioner of Income Tax (Appeals) upheld this penalty. The Tribunal, however, found that imposing multiple penalties for each non-compliance was excessive and contrary to the intent of Section 272A(1)(d), which is meant to be deterrent rather than a revenue-earning provision. The Tribunal referenced a similar case, Tarlok Singh Through Legal Heir Gurnam Singh vs. ITO, to support its decision to reduce the penalty to Rs. 10,000.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473695 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Tarlok Singh Through Legal Heir Gurnam Singh vs. ITO Ward Gurdaspur
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MAMTA SINGH
• Assessee Lawyers: P. F. JAIN
• Keywords: Period of limitation; Time period of passing order; Non compliance
• Section: 144; 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.1794/Ahd/2024 (Assessment Year: 2017-18) Bhagvandas Hirachand Wachhani, F-104, Silalekh Flats, Shahibaug, Ahmedabad-380004 Vs. Income Tax Officer, NFAC, Delhi Present Jurisdiction Income Tax Officer, Ward-7(2)(1), Ahmedabad [PAN No.ACJPV5932F] (Appellant) .. (Respondent) Appellant by : Shri P.F. Jain, A.R. Respondent by: Smt. Mamta Singh, Sr. DR Date of Hearing 24.02.2025 Date of Pronouncement 25.02.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 30.09.2024 passed for A.Y. 2017-18. 2. The assessee has taken the following grounds of appeal:- “(1) The Ld. CIT(A) has erred in law and facts in upholding the penalty of Rs. 30,000/- u/s. 272A(1)(d) without properly appreciating the facts of the assessee. (2) The Ld. CIT(A) has erred in law and facts in not considering the written submission dated 01.03.2023 in as much as that the submission made during the assessment proceedings giving full details has not been considered. (3) On the facts of the assessee the penalty levied after expiry of limitation period ought to have been deleted. ITA No. 1794/Ahd/2024 Bhagvandas Hirachand Wachhani vs. ITO Asst.Year –2017-18 - 2– (4) He has erred in law and facts in holding that the penalty has not become time barred. (5) On the facts no such penalty of Rs. 30,000/- u/s. 272A(1)(d) ought to have been levied. (6) The appellant craves, to leave, to add, to alter, and or modify any grounds of appeal.” 3. The brief facts of the case are that during the course of assessment, the Assessing Officer added a sum of Rs. 9,09,100/- towards unexplained expenditure made by the assessee through his credit card. Further, the Assessing Officer also imposed penalty under Section 272A(1)(d) of the Act on account of default in compliance to the following notices issued by the Assessing Officer: Sl. No. Notice Number of notice Date of notice 1 142(1) TBS/AST/F/142(1)/2019-20/1018714239(1) 09.10.2019 2 142(1) ITBA/AST/F/142(1)/2019-20/1017439529(1) 19.08.2019 3 143(2) TBS/AST/S/143(2)/2018-19/1011295286(2) 14.08.2018 4. In appeal, Ld. CIT(A) confirmed the penalty of Rs. 30,000/- @ Rs. 10,000/- for each default. 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A). 6. On going through the facts of the instant case, in our considered view in the interest of justice, the penalty under Section 272A(1)(d) may be restricted to Rs. 10,000/-. In our view, the provisions of Section 272A(1)(d) are “deterrent in nature” and not for the purpose of earning revenue. The remedy available with the Assessing Officer lies in framing of best judgment assessment under the provisions of Section 144 of the Act, as he did in the present and not to impose multiple penalties under Section 272A(1)(d) of the Act, again and again. Accordingly, levy of penalty is directed to be restricted to Rs. 10,000/-. In the ITA No. 1794/Ahd/2024 Bhagvandas Hirachand Wachhani vs. ITO Asst.Year –2017-18 - 3– case of Tarlok Singh Through Legal Heir Gurnam Singh vs. ITO Ward Gurdaspur 2023 (6) TMI 479 – ITAT Amritsar, while passing the order the ITAT made the following observations: “The remedy available with the Assessing Officer lies in framing of best judgment assessment under the provisions of Section 144 of the Act, as he did and not to impose multiple penalties under section 272A(1)(d) of the Act again and again. We therefore restrict the penalty levied under section 272A(1)(d) of the Act to one default as against multiple defaults on non compliance with these notices under section 142(1) of the Act. Accordingly, penalty imposed is restricted to Rs. 10,000/-.” 7. Accordingly, looking into the instant facts, in the interest of justice, the penalty is directed to be restricted to Rs. 10,000/-. 8. In the result, the appeal of the assessee is partly allowed. This Order is pronounced in the Open Court on 25/02/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 25/02/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 24.02.2025 2. Date on which the typed draft is placed before the Dictating Member 25.02.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 25.02.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 25.02.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 25.02.2025 7. Date on which the file goes to the Bench Clerk 25.02.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… "