Sudhakar Reddy Mettu, USA V. ACIT., International Taxation-1, Hyderabad

ITA 232/Hyd/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6983 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 26-05-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 08-03-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVES MADHUKAR
• Keywords: Reasonable cause; Condonation of delay; Set aside
• Section: 143(3); 142(1); 143(2); 272A

Judgement Text

आयकर अपीलीय अिधकरण, हैदराबाद पीठ मŐ IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B” , HYDERABAD BEFORE SHRI LALIET KUMAR, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA, G. HON’BLE ACCOUNANT MEMBER ITA No.232/Hyd/2024 Assessment Year: 2018-19 M/s. Lanco Rithwik Joint Venture, Plot No.37 and 39, Navodaya Colony, Road No.2, Banjara Hills, Hyderabad – 500034. PAN : AABAL3655J Vs. The Income Tax Officer, Ward – 14(1), Hyderabad. (Appellant / Assessee) (Respondent) Assessee by: Shri P. Murali Mohan Rao Revenue by: Shri AVES Madhukar, Sr.A.R. Date of hearing: 09.05.2024 Date of pronouncement: 09.05.2024 O R D E R PER MANJUNATHA G. A.M: This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi passed on 07.02.2023 for the assessment year 2018-19. 2 ITA 232/Hyd/2023 2. At the outset, we find that there is a delay of 11 days in filing the appeal before the Tribunal for which necessary petition for condonation of delay along with the affidavit explaining the reasons for the delay in filing the appeal has been filed. 3. The learned counsel for the assessee referring to the petition filed by the assessee for condonation of delay has submitted that the appeal could not be filed in the stipulated time as the order passed by ld.CIT(A) was misplaced with some other papers in the office of the assessee company and that appeal was filed on finding of the order and that the delay was due to the circumstances which were beyond the control of the assessee and hence, the delay caused in filing the appeal may be condoned. 4. The ld. DR Shri AVES Madhukar, on the other hand, has not raised any objection for the petition filed by the assessee for condoning the delay caused in filing the appeal. 5. We have heard both the parties and considered the relevant contents of the petition filed by the assessee for condoning the delay in filing the appeal and after considering the recorded reasons by the appellant, the delay in filing of 11 days is hereby condoned and the appeal of the assessee is admitted for hearing. 3 ITA 232/Hyd/2023 6. The grounds raised by the assessee reads as under : “1. The order of the Ld. CIT(A) is erroneous both on facts and in law to the extent it is prejudicial to the interest of the appellant. 2. The Appellate order of the CIT(A) dt. 07-02-2023 is erroneous, in as much as the Appellate Authority has upheld the levy of penalty u/s 272A(1)(d) by the AO, without fairly considering the reasons for delayed response to the notice u/s 142(1). 3. The Ld. CIT(A) ought to have appreciated that the Ld.AO erred in levying the penalty u/s 272A (1)(d) of the Act without appreciating the facts of the case and circumstances, leading to belated response to notice issued u/s 142(1) dt. 22- 12-2020 4. The Ld. CIT(A) ought to have appreciated the fact that assessee has not totally failed to respond to the notice issued u/s 142(1) dt. 22-12-2020, but delayed the submission of information, because of reasonable cause on assessee that the assessee had submitted all the required information before the Ld. CIT(A) and the assessment order has been passed u/s 143(3). 5. The Ld. CIT(A) ought to have appreciated that the assessee could not respond to the notice as the circumstances were beyond its control and Technical there is no intention of not attending or non-submission of any information to Ld. AO and there is no wilful attempt not to respond to the notices. 7. Facts of the case, in brief, are that the assessee is a Joint Venture and has a status of an AOP. In the course of assessment proceedings for A.Y. 2018-19, the assessee has been issued various notices u/s 143(2) and 142(1) of the Act directing the assessee to furnish necessary information and once such notice u/s 142(1) of the Act was issued on 22.12.2020. The assessee did not file any response to notice u/s 142(1) of the Act issued by the Assessing Officer. Therefore, the Assessing Officer has initiated penalty proceeding u/s 272A(1)(d) of the Income Tax Act, 1961 for failure to comply with notice u/s 142(1) of the Act and called upon the assessee to explain as to why the penalty shall not be levied for non-compliance. In response, the assessee submitted that 4 ITA 232/Hyd/2023 although it has not responded to 142(1) notice dt.22.12.2020 but subsequently, it has replied to notice u/s 142(1) of the Act dt.08.04.2021 by way of a response dt.16.04.2021 which covers the issues raised by the Assessing Officer in the notice dt.22.12.2020. Further, the Assessing Officer had also considered the reply filed by the assessee and has completed the assessment u/s 143(3) of the Act on 11.08.2021 and thus, the question of levying penalty for non-compliance u/s 272A(1)(d) of the Act does not arise. The Assessing Officer, however was not convinced with the explanation furnished by the assessee and accordingly levied penalty u/s 272A(1)(d) of the Act of Rs.10,000/- for failure to comply with a notice u/s 142(1) of the Act. The assessee carried the matter in appeal before the first appellate authority but could not succeed. The ld.CIT(A) for the reasons stated in their appellate order dt.07.02.2023 sustained penalty levied by the Assessing Officer and dismiss the appeal of the assessee. 8. Aggrieved by the order of ld.CIT(A), assessee is now in appeal before us. 9. The learned counsel for the assessee, Shri P. Murali Mohan Rao, submitted that the ld.CIT(A) erred in sustaining the penalty levied by the Assessing Officer u/s 272A(1)(d) of the Act without appreciating the facts of the case. Although, the assessee has failed to comply the notice issued u/s 142(1) of the Act 5 ITA 232/Hyd/2023 dt.22.12.2020 but subsequently, it has submitted all the details in response to another notice issued u/s 142(1) of the Act dt.08.04.2021 and further on the basis of the reply submitted by the assessee, the Assessing Officer has completed the assessment. Therefore, the ld.CIT(A) ought to have delete the penalty levied u/s 272A(1)(d) of the Act because in the given facts and circumstances of the case, it cannot be said that the assessee has not complied with information sought by the Assessing Officer. In this regard, he relied upon various judicial pronouncements, including the decision of ITAT, Allahabad in the case of Hanuman Prasad and Sons Vs. DCIT in ITA No.20/ALLD/2022 dt.13.09.2022. 10. The ld. DR, on the other hand, supporting the order of the ld.CIT(A) submitted that the provisions of Section 272A(1)(d) of the Act provides for levy of penalty for failure to comply with notices issued u/s 142(1) of the Act and such penalty is on each failure and thus, even if the assessee replies to subsequent notices, fails to comply with earlier notice attracts provisions of Section 272A(1)(d) of the Act and thus, the Assessing Officer has rightly levied the penalty. 11. Heard both the parties and perused the material available on record and have gone through the orders of authorities below. The Assessing Officer has issued various notices u/s 143(2) and 142(1) of the Income Tax Act, 1961. The 6 ITA 232/Hyd/2023 assessee has responded to all the notices issued by the Assessing Officer except for the notice issued u/s 142(1) dt.22.12.2020. Infact, if we go through the order passed by the Assessing Officer imposing the penalty u/s 272A(1)(d) of the Act, it is undisputedly clear that the Assessing Officer has levied penalty for not complying with notice issued u/s 142(1) of the Act dt.22.12.2020. The assessee claims that although it has not complied with notice dt.22.12.2020, but it has furnished all the details, in response to subsequent notices issued u/s 142(1) of the Act dt.08.04.2021 by way of reply dt.16.04.2021 and the said reply covers all the issues raised by the Assessing Officer in his notice dt.22.12.2020. 12. We find that the Assessing Officer has completed the assessment on the basis of the subsequent reply filed by the assessee dt.16.04.2021 in response to notice u/s 142(1) of the Act dt.08.04.2021. Once the Assessing Officer has completed the assessment after considering the replies filed by the assessee in response to various notices issued u/s 143(2) and 142(1) of the Act, in our considered opinion, it cannot be said that the assessee has not complied with notice issued by the Assessing Officer from time to time for completion of the assessment. Further, even if there is any non-compliance of the notice but subsequently, if the assessee replies to any notice issued by the Assessing Officer and such reply covers all the issues raised by the Assessing Officer in earlier notices issued under various sections, then it cannot be 7 ITA 232/Hyd/2023 said that the assessee has complied with the details sought by the Assessing Officer to complete the assessment. Since the Assessing Officer has not completed the assessment after considering the replies submitted by the assessee in response to subsequent notice, in our considered opinion, the Assessing Officer ought not to have levied penalty u/s 272A(1)(d) of the Act for non-compliance of a single notice. This legal position is supported by the judicial pronouncement passed by ITAT, Hyderabad Bench in the case of P.C. Pantulu Vs. DCIT in ITA No.276/Hyd/2017 dt.11.04.2018. Therefore, we are of the considered opinion that the Assessing Officer has erred in levying the penalty u/s 272A(1)(d) of the Act and the ld.CIT(A) without appreciating the facts sustained the penalty levied by the Assessing Officer. Thus, we set aside the order passed by the ld.CIT(A) and direct the Assessing Officer to delete the penalty levied u/s 272A(1)(d) of the Act. Accordingly, the appeal of the assessee is allowed. 13. In the result, the appeal filed by the assessee is allowed. Order pronounced in the Open Court on 09 th May, 2024. Sd/- Sd/- (MANJUNATHA. G.) ACCOUNTANT MEMBER (LALIET KUMAR) JUDICIAL MEMBER Hyderabad, dated 9 th May, 2024. TYNM/sps 8 ITA 232/Hyd/2023 Copy to: S.No Addresses 1 M/s. Lanco Rithwik Joint Venture, Plot No.37 and 39, Navodaya Colony, Road No.2, Banjara Hills, Hyderabad – 500034. 2 The Income Tax Officer, Ward – 14(1), Hyderabad. 3 Prl.CIT, Hyderabad. 4 DR, ITAT Hyderabad Benches 5 Guard File By Order