Dipakkumar Ashvinbhai Bhensdadia, Navsari V. Income Tax Officer, Ward-2, Navsari

ITA 76/SRT/2023

AI Insights

The case involves Dipakkumar Ashvinbhai Bhendadia, the appellant, who faced a penalty of Rs. 10,000 for non-compliance with notices under section 142(1) of the Income Tax Act, 1961, during the assessment year 2017-18. The notices were issued by the Income Tax Officer, Ward-2, Navsari, but were not complied with by the assessee, leading to a penalty under section 272A(1)(d). The assessee contended that the notices were not received as they were sent to an outdated email address, despite having updated his contact information with the Department. The Commissioner of Income Tax (Appeals) confirmed the penalty, which was then challenged in the Tribunal. The Tribunal, after considering the circumstances, ruled in favor of the assessee, highlighting the reasonable cause for non-compliance due to the administrative oversight of the Department.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301894 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-05-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 01-02-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 142(1); 272A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर अपील सं./ITA No.76/SRT/2023 Assessment Year: (2017-18) (Physical Hearing) Dipakkumar Ashvinbhai Bhendadia, Super Agency,Opp. Jaideep Cinema, Chikhli, Navsari, Gujarat – 396521. Vs. The ITO, Ward-2, Navsari. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AJWPB7944H (Appellant) (Respondent) Appellant by Ms Chaitali Shah, CA Respondent by Shri Vinod Kumar, Sr. DR Date of Hearing 03/05/2023 Date of Pronouncement 15/05/2023 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2017-18, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), Surat [in short “the ld. CIT(A)”], National Faceless Appeal Centre (in short ‘ NFAC’), which in turn arises out of a penalty order passed by the Assessing Officer under section 272A(1)(d) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). 2. Grounds of appeal raised by the assessee are as follows: “1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of Assessing Officer in levying penalty of Rs.10,000/- u/s 272A(1)(d) of the I.T. Act, 1961. 2. It is therefore prayed that the above penalty levied by assessing officer and confirmed by Commissioner of Income Tax (Appeals) may please be deleted. 3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 3. Succinct facts qua the issue are that assessee`s case was selected under scrutiny and notices u/s. 142(1) of the Act, were issued to the assessee, which ITA.76/SRT/2023/AY.2017-18 Dipakkumar A. Bhendadia Page | 2 were not complied with by the assessee. The Notices u/s 142(1) of the Act were issued on 30.05.2019, 07.09.2019, 10.11.2019 and 05.12.2019. The assessee responded on 15.12.2019 stating that he had not received any notice as mentioned. However, the Assessing Officer verified from the ITBA and found that notices were delivered at email provided in the return of the income. Therefore, assessing officer held that nothing has been explained by the assessee as to why he did not comply with the notices issued under section 142(1) of the Act. The assessee has, without reasonable cause, failed to comply with the notices issued under section 142(1) of the Act and also failed to properly explain the reason for doing so. Hence assessing officer held that assessee has committed default under section 272A(1)(d) of the I.T. Act and therefore, imposed a penalty of Rs.10,000/-. 4. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has confirmed the action of the Assessing Officer. Aggrieved by the order of Ld. CIT(A), the assessee is in further appeal before us. 5. Learned Counsel for the assessee submitted that notices of hearing were not delivered on the physical address given by the assessee. The Ld. Counsel submitted that assessee has changed the address and intimated the Assessing Officer vide Acknowledgement No. 227594861260121 (see paper book page no.8), therefore, Ld. Counsel contended that assesse has intimated to the Department through e-mail id (vide paper book page no.7). However, despite of this, the Department sent the notices on the old e-mail id, therefore notices of hearings were not received by the assessee. The ld Counsel stated that assessee has proved the bonafide and reasonable cause, hence penalty should not be levied on the assessee. 6. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. ITA.76/SRT/2023/AY.2017-18 Dipakkumar A. Bhendadia Page | 3 7. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that Assessing Officer has imposed the penalty under section 272A(1)(d) of the Income Tax Act which is in respect of failure to answer questions, sign statements, furnish information, return or statements and allow inspection etc. The Clause (d) of sub-section (1) of Section 272A states that if any person fails to comply with a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or fails to comply with a direction issued under sub-section (2A) of section 142, he shall pay, by way of penalty, a sum of Rs.10,000/- for each such default or failure. 8. We note that assessee couldn't comply with the notices issued to him in the assessment proceedings, as the assessee didn't received any notices from AO neither by physically nor through email, as the notices were sent by assessing officer on the assessee’s old email -id and not on new address. The assessee has changed the address and intimated the changed address to the Assessing Officer vide Acknowledgement No. 227594861260121, hence there is no mistake on the part of the assessee. Hence, it can be concluded that assessee has reasonable cause for not complying with notices issued in the course of assessment proceedings therefore penalty should not be imposed. Therefore, we delete the penalty of Rs.10000/-. 9. In the result, appeal filed by the assessee is allowed. Order is pronounced on 15/05/2023 in the open court. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 15/05/2023 SAMANTA Copy of the Order forwarded to 1. The Assessee ITA.76/SRT/2023/AY.2017-18 Dipakkumar A. Bhendadia Page | 4 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat