K 629 MERKUPATHY PRIMARY AGRICULTURAL CO OP CREDIT SOCIETY,TIRUPUR V. INCOME TAX OFFICER, WARD 1(2) TIRUPUR, TIRUPUR

ITA 575/CHNY/2025

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The case involves K 629 Merkupathy Primary Agricultural Co-op. Credit Society, which appealed against the penalty imposed by the Income Tax Officer for non-compliance with statutory notices during the assessment year 2020-21. The Assessing Officer had issued several notices under sections 143(2) and 142(1) of the Income Tax Act, 1961, which the assessee failed to respond to. The penalty was confirmed by the CIT(A) due to the lack of response from the assessee. The Tribunal found that the assessee did not provide any evidence of a bona fide effort to comply with the notices or communicate difficulties in a timely manner, thus upholding the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 125982 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2020-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M.P. GURUPRASAD
• Assessee Lawyers: A. VIJAYALAKSHMI; VIRTUAL
• Keywords: Reasonable cause
• Section: 144; 142(1); 143(2); 273B

Judgement Text

"आयकर अपीलीय अिधकरण, ’डी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी जगदीश, लेखा सद˟ क े समƗ । Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri Jagadish, Accountant Member आयकर अपील सं./I.T.A. No.575/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2020-21 K 629 Merkupathy Primary Agricultural Co-op. Credit Society, Abishekarapuram, Kunnathur, Tirupur 638 103. [PAN:AABAK6176B] Vs. The Income Tax Officer, Ward 1(2), Tirupur. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Ms. A. Vijayalakshmi, CA (Virtual) ŮȑथŎ की ओर से/Respondent by : Shri M.P. Guru Prasad, Addl. CIT सुनवाई की तारीख/ Date of hearing : 22.04.2025 घोषणा की तारीख /Date of Pronouncement : 25.04.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 23.12.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2020-21. 2. Ground No. 1 & 2 raised by the assessee involving only issue as to whether the ld. CIT(A) is justified in confirming the order of the Assessing Officer passed under section 272A(1)(d) of the Income Tax Act, 1961 I.T.A. No.575/Chny/25 2 [“Act” in short] without there being any opportunity in the facts and circumstances of the case. 3. Brief facts of the case are that the assessee is an agricultural co- operative credit society and filed return of income declaring income at NIL. According to the Assessing Officer, the said return of income was selected for scrutiny for the reasons reflecting in page 1 of the penalty order. The assessment was completed under section 144 r.w.s. 144B of the Act determining the total income at ₹.78,74,515/-. In the penalty order, the Assessing Officer stated that during the course of assessment proceedings, notice under section 143(2) of the Act dated 29.06.2021 and notices under section 142(1) of the Act dated 08.11.2021 & 25.11.2021 have been issued by the Assessing Officer. According to the Assessing Officer, the said 3 notices were served on the assessee, but, the assessee failed to furnish any response to the 3 notices. Further, during the course of penalty proceedings, there was no reply furnished by the assessee to the penalty notice dated 20.09.2022, show-cause notice dated 20.09.2022 and another show-cause notice dated 27.10.2022. Further, a letter dated 06.01.2023 and 01.02.2023 issued to the assessee on its registered e-mail ID seeking response. However, there was no response from the assessee. A reference was made to the verification I.T.A. No.575/Chny/25 3 unit for physically delivery/ service the letter upon the assessee and as per the report of the verification unit, the letter was physically served upon Smt. V. Jothilakshmi, Secretary of Society on 07.02.2023, but, however, there was no response from the assessee. In view of the above stated facts, the Assessing officer imposed penalty under section 272A(1)(d) of the Act for each default of non-compliance to the statutory notices. 4. Having aggrieved by the order of the Assessing Officer for levying penalty, the assessee preferred an appeal before the ld. CIT(A). Since there was no response to the notices issued by the Assessing Officer, having no alternative, the ld. CIT(A) confirmed the penalty imposed by the Assessing Officer for the reasons stated in para 5.2.1 of the impugned order. 5. The ld. AR Ms. A. Vijayalakshmi, CA submits that there is sufficient cause under section 273B of the Act. The ld. AR also submits that the assessee has not received any e-mail from the Assessing Officer, due to which, the assessee could not represent its case before the Assessing Officer as well as the ld. CIT(A). The ld. AR vehemently argued that there is sufficient cause under section 273 of the Act. Further, she submits that the activities of the society carried out by appointed Secretary. He was promoted to Secretary by experience and does not have enough I.T.A. No.575/Chny/25 4 knowledge about the income tax matter. Further, in quantum appeal, the ld. CIT(A) remitted the matter to the Assessing Officer for his consideration. 6. The ld. DR Shri M.P. Guru Prasad, Addl. CIT relied on the order of the ld. CIT(A) and drew our attention to para 5.2.1 of the impugned order. 7. Having heard both the parties and on perusal of the record, we note that the Assessing Officer, during the course of penalty proceedings, has given ample opportunity to the assessee for compliance. Admittedly, there was no response to the statutory notices issued under section 143(2) of the Act and the notices issued under section 142(1) of the Act. Para 2 of the penalty order clearly shows that one notice under section 143(2) of the Act and 2 notices under section 142(1) of the Act were issued, but, however, there was no response to the said notices. Further, the Assessing Officer gave ample opportunities in issuing notice dated 20.09.2022 in initiating proceedings under section 272A(1)(d) of the Act. However, we find no response from the assessee. Further, the Assessing Officer issued 2 show-cause notices dated 20.09.2022 and 27.10.2022, but, however, there was no response from the assessee. Further, for non- compliance to statutory notices under section 143(2) of the Act and 142(1) of the Act, the Assessing Officer issued a letter dated 06.01.2023 I.T.A. No.575/Chny/25 5 and 01.02.2023 on its all email IDs available on record, but, however, there was no response from the assessee. Finally, the Assessing Officer served notice on the Secretary of the society, but, however, we find no compliance at all made by the assessee. Before first appellate authority, on perusal of the impugned order, we find that the assessee did not provide evidence of any bonafide effort to either to comply with the notices or communicate its difficulties to the income tax authorities. For better understanding, we reproduce herein below para 5.2.1 of the impugned order: 5.2.1 The obligation to respond to notices issued under the income Tax is statutory, The appellant's inability to hire a qualified accountant does not absolve it from its duty to comply with legal requirements. Adequate arrangements could have been made to ensure timely compliance, such as engaging external professionals or seeking extensions, which were not demonstrated in this case. The department provides sufficient time and multiple opportunities for compliance during e-proceedings. The appellant did not demonstrate any proactive steps to address the situation despite being aware of its lack of resources. Ignorance or unavailability of personnel cannot be used as a valid excuse, as taxpayers are presumed to have knowledge of their legal obligations under the Act. Non- compliance with notices hampers the assessment process and disrupts the administration of tax laws. Such behavior cannot be condoned without reasonable cause, which the appellant failed to establish satisfactorily. Further, the appellant did not provide evidence of any bona fide effort to either comply with the notices or communicate its difficulties to the Income Tax Authorities in a timely manner. The explanation provided does not qualify as a \"sufficient cause\" under the law for the failure to comply with notices. The appellant's justification lacks merit and does not warrant the waiver of the penalty. Based on the above, the penalty under Section 272A(1)(d) is confirmed, as the appellant has failed to demonstrate any valid or sufficient cause for non-compliance. 8. On perusal of the impugned order in para 5.2.1, we find no reason to interfere with the order of the ld. CIT(A) and completely agree with the I.T.A. No.575/Chny/25 6 reasons recorded by the first appellate authority and it is justified. Accordingly, the grounds raised by the assessee are dismissed. 9. In the result, the appeal filed by the assessee is dismissed. Order pronounced on 25th April, 2025 at Chennai. Sd/- Sd/- (JAGADISH) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 25.04.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. "