RADHA SONI,NICHLA BAZAR CUSTOM GATE V. .NAFCDELHI, DELHI

ITA 9/AGR/2024

AI Insights

The case revolves around a penalty imposed on Mrs. Radha Soni by the Income Tax Officer for non-compliance with a notice under section 142(1) during reassessment proceedings for the assessment year 2014-15. The notice was issued on 30.09.2020, a period affected by the COVID-19 pandemic. The assessee did not comply with the notice, leading to a penalty of Rs. 10,000. The penalty was confirmed by the CIT(Appeals), which led to the filing of an appeal with the Income Tax Appellate Tribunal. The Tribunal, considering the extraordinary circumstances of the pandemic and the legal extensions provided, ruled in favor of the assessee, highlighting the reasonable cause for non-compliance.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 23159 (ITAT-AGRA)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 09-01-2024
• Other Referred Cases: Suo Motu writ petition (C) No. 3 of 2020 in Re: Cognizance for Extension of Limitation
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILENDRA SRIVASTAVA
• Keywords: Reasonable cause; Reassessment proceedings; Period of limitation; Principle of natural justice; Non compliance
• Section: 147; 142(1); 273B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH, AGRA BEFORE: SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No. 09/Agr/2024 Assessment Year: 2014-15 Mrs. Radha Soni, Nichla Bazar Custom Gate Road, Shivpuri. PAN: CUKPS7099K v. Income-tax Officer, Ashok Nagar. (Appellant) (Respondent) Assesseeby : None ( written submissions dated 20.08.2024 filed by the assessee) Revenue by : Sh. Shailendra Srivastava, Sr. DR Date of hearing : 09.12.2024 Date of Pronouncement : 11/12/2024 ORDER This appeal in ITA No. 09/Agr/2024 for the assessment year 2014-15 has arisen from the appellate order dated 16.11.2023(DIN& Order No. ITBA/NFAC/S/250/2023-24/1057991906(1)) passed by learned Commissioner of Income-tax(Appeals), NFAC, Delhi confirming penalty of Rs. 10,000/- levied by the AO u/s 271(1)(b) on the assessee for non compliance of notice u/s 142(1) dated 30.09.2020, which appeal in turn has arisen from the penalty order dated 21.12.2021 passed by Assessing Officer(NFAC, Delhi) u/s. ITA No. 09/Agr/2024 2 271(1)(b) of the Income-tax Act, 1961, imposing penalty of Rs. 10,000/-(DIN ITBA/PNL/F/271(1)(b)/2021-22/1038000363(1)). 2.Grounds of appeal raised by the assesseein the memo of appeal filed with Income Tax Appellate Tribunal, Agra Bench, Agra reads as under : “1 That under the facts and circumstances of the case and in law, the Learned CIT (appeals) Income Tax Department has erred in confirming the penalty order passed by the Assessing Officer under section 271(1)(b) dated 21/12/2021 an amount of Rs. 10,000/- without considering the complete reply filed by the assessee during the course of appellate proceeding, which is against the principle of natural justice and unjustified in law, Please be quashed the order. 2 That under the facts and circumstances of the case and in law, the order passed by the assessing officer under section 271(1)(b) is barred by limitation as per provision of section 275 of the Income Tax Act 1961 and confirming the penalty order by the Learned CIT(Appeals) without decided this issue which is against the principle of natural justice and unjustified, Please be quashed. 3 That under the facts and circumstances of the case and in law, the learned CIT (Appeals) as well as Assessing officer has erred in not accepting the prevented by reasonable cause for non- compliance of notice under section 142(1) on 30/09/2020 which is against the principle of natural justice and unjustified, Please be quashed. 4. That under the facts and circumstances of the case and in law, the learned assessing officer has erred in imposing the penalty under section 271(1)(b) at Rs. 10,000/- on the grounds that the assessee has not challenged for initiation of penalty by raising in grounds of appeal in form No 35 against the assessment order which is without any basis actually raised the grounds in form No 35 as under - That under the facts and circumstances of the case and in law, the learned assessing officer has erred in initiating the penalty proceedings under section 271(1)(c), 271 F and 271(1)(b) of the Income Tax Act 1961 is illegal and against the principle of natural justice. Please be deleted the initiation of penalty proceeding in the body of the order thus the order passed by the ITA No. 09/Agr/2024 3 assessing officer and confirmed by the CIT(Appeals) is unwarranted in law and also against the principle of natural justice, Please be quashed. 5 That under the facts and circumstances of the case and in law, the learned assessing officer has erred in not taken into consideration prevented by reasonable cause for non-compliances of notice due to Corona virus pandemic before imposing the penalty under section 271(1)(b) for no compliance of notice under section 142(1) of the Income Tax Act 1961 which was confirmed by the CIT ( Appeals) which is against principle of natural justice and illegal and unsustainable in law, please be deleted. 6 That under the facts and circumstances of the case and in law, the learned CIT (Appeals) has erred in confirming the penalty order under section 271(1)(b) of the Act 1961 is without any basis, only on surmises and presumption which is illegal, unwarranted in law and also against the principle of natural justice. Please deleted the penalty of Rs. 10,000/- under section 271(1)(b) of the Act 1961 imposed by the assessing officer as well as confirmed by the CIT(Appeals) 7 That under the facts and circumstances of the case, the Assessing Officer has erred in providing the opportunity before imposing the penalty and Learned ACI(Appeal) has also erred before deciding the appeal on this count, thus the order passed by the CIT(A) and as well as assessing Officer is against the Principe of natural justice and unjustifed 8 That the appellant reserves the right to craves leave to add/amend/any/all grounds of appeal before or at the time of hearing of the appeal. 9 That for these such other grounds that may be argued at time of hearing, the appellant prays that the appeal may please be allowed.” 3. Brief facts of the case are that re-assessment in the case of assesseefor the impugned assessment year 2014-15 was completed by the AO u/s. 147 r.w.s. 144 of the Act , on 25.09.2021 . During the ITA No. 09/Agr/2024 4 course of reassessment proceedings, notice u/s. 142(1) was issued by the AO on 30.09.2020 to the assesseeto furnish certain information in connection with re-assessment proceedings, but there was no compliance on behalf of the assessee. Hence, penalty proceedings u/s. 271(1)(b) of the Act was initiated by the Assessing Officer vide notice dated 25.09.2021, but no reply was submitted by the assesse. Several opportunities were provided to the assessee during the course of penalty proceedings, but there was no compliance by the assessee, which led to levy of penalty of Rs.10,000/- by the Assessing Officer u/s. 271(1)(b) of the Act for non- compliance of notice issued by the Assessing Officer u/s. 142(1) dated 30.09.2020. 4. Aggrieved, the assessee filed first appeal with the ld. CIT(Appeals) and the assessee submitted before ld. CIT(Appeals) that it was due to outbreak of Covid-19 pandemic, the assessee could not make compliance of notice issued by the AO u/s 142(1) dated 30.09.2020, during the reassessment proceedings . The assessee also referred to the order passed by Hon’ble Supreme Court regarding extension of limitation during Covid-19 pandemic and also to Press Release issued by CBDT extending due date of statutory complianceduring ITA No. 09/Agr/2024 5 the outbreak of Covid-19 Pandemic. Ld. CIT(Appeals) dismissed the appeal of the assessee by holding that Hon’ble Supreme Court as well as CBDT has only extended due date of statutory filing due to Covid-19 pandemic, but there is no exemption granted for levying of penalty for default of non-compliance of the statutory notices. Thus, as per ld. CIT(A), the assessee has not shown reasonable cause for non complying with the notice dated 30.09.2020 issued by the AO u/s 142(1) during re-assessment proceedings. Thus, penalty imposed by Assessing Officer was confirmed by learned CIT(A). 5. Aggrieved, the assessee filed second appeal with the Tribunal and none appeared on behalf of the assessee when this appeal was called for hearing. The assesseehas , however, filed written submissions dated 20.08.2024 , which are placed on record in file. The assessee has stated in the written submissions that mainly due to outbreak of Covid-19 pandemic, the assessee could not comply with notice dated 30.09.2020 issued by the AO u/s 142(1) during the course of re-assessment proceedings. The assessee has also relied on the order of Hon’ble Supreme Court dated 10.01.2022 in MA No. 21 of 2022 in MA no. 665 of 2021 in Suo Motu writ petition (C) No. 3 of 2020 in Re: Cognizance for Extension of Limitation. The ITA No. 09/Agr/2024 6 assesseehas also relied upon Press Release dated 17.09.2021 issued by CBDT, Ministry of Finance, GOI, for extending certain timeliness to ease compliance. 5.2 Ld. Sr. DR appeared on behalf of the department and submitted that the penalty u/s. 271(1)(b) was levied for non-compliance of statutory notice u/s. 142(1) dated 30.09.2020 , during the course of reassessment proceedings. 6. I have heard the ld. DR and perused material on record including written submissions filed by the assessee. I have observed that the reassessment proceedings were initiated against the assessee by the department u/s. 147/148 of the Act, which led to the reassessment order dated 25.09.2021passed by the AO u/s. 147 r.w.s. 144 of the Act. The Assessing Officer had issued statutory notice u/s. 142(1) dated 30.09.2020 during the course of reassessment proceedings, but the assessee did not comply with the said notice, which ultimately led to levy of penalty u/s. 271(1)(b) of the Act to the tune of Rs.10,000/- by the AO on the assessee. The assessee did not filed any reply/response during penalty proceedings before the AO. The first appeal filed by the assessee with ld. CIT(Appeals) met with the dismissal of the said appeal by the ld. CIT(Appeals) despite the ITA No. 09/Agr/2024 7 assessee raising the issue that the notice u/s. 142(1) was issued on 30.09.2020, whichwas a period covered by Covid-19 pandemic, and the non-compliance was mainly owing to outbreak of Covid-19 pandemic. The assessee has relied upon the order of Hon’ble Supreme Court in Re Cognizance for Extension of Limitation in MA No. 21/2022 in MA No. 665 of 2021 in Suo Motu Writ Petition (C) No. 3 of 2020 , order dated January 10, 2022. The assessee has also relied upon CBDT Press Release dated 17.09.2021, wherein Government has extended timeliness to ease compliance. I am of the considered view that the assessee has duly explained the reasonable cause for non-compliance of the notice u/s. 142(1) dated 30.09.2020 issued by the AO during reassessment proceedings, being the period covered by outbreak of Covid-19 Pandemic when the whole humanity across the globe including India was facing the greatest human crisis and sufferings, leading to deaths , disease and severe ailments. The whole world was also grappling with lock-downs announced by their respective Governments including the Govt. of India/State Governments. Even Hon’ble Supreme Court extended the date of limitations for filing petitions/appeals/applications/suits/all other quasi judicial proceedings under the general law of limitation or under ITA No. 09/Agr/2024 8 special laws(both Central and/or the State) due to outbreak of the Covid-19 pandemic. Thus, the Apex Court directed extension of the period of limitation in all proceedings before Courts/Tribunal by excluding the period between 15.03.2020 to 28.02.2022 for the purposes of limitations under any general or special laws in respect of all judicial or quasi judicial proceedings. There were further directions also by Apex Court in the aforesaid order. The CBDT has also extended time lines to ease compliances vide orders dated 17.09.2021. Provisions of Section 271(1)(b) are subject to provisions of Section 273B. If the assesseedemonstrate reasonable cause for failure to comply with notice issued u/s 142(1), the assessee will be out of clutches of the penalty u/s 271(1)(b). The assessee has submitted that there was an outbreak of Covid-19 pandemic , which brought human sufferings , disease and death across globe including India , and also life and liberty of the people were affected due to lockdowns imposed by Governments across globe including GOI and State Governments during the outbreak of Covid-19 disease, which was the cause for non compliance with notice dated 30.09.2020 issued by the AO u/s 142(1) during reassessment period. This period is unquestionably covered by Covid-19 pandemic, as even Hon’ble ITA No. 09/Agr/2024 9 Supreme Court excluded period from 15.03.2020 to 28.02.2022 owing to outbreak of Covid-19 pandemic from computing limitation period. The assessee did not comply with the notices issued during penalty proceedings before the AO, and an ex-parte order dated 21.12.2021 was passed by the AO levying penalty of Rs. 10,000/- u/s 271(1)(b) on the assessee for non complying with the notice dated 30.09.2020 issued by the AO u/s 142(1) during reassessment proceedings. But, it is very unfortunate that the assessee having raised the reasonable cause before ld. CIT(A) for non-compliance of notice dated 30.09.2020 issued by the AO u/s 142(1) during reassessment proceedings , on account of Covid-19 pandemic, the ld. CIT(Appeals) tried to distinguished between the extension of limitation by Hon’ble Supreme Court and the consequences of non- compliance/default in complying with notice for hearing issued u/s 142(1) dated 30.09.2020, leading to confirmation of penalty as was levied by the AO u/s. 271(1)(b) of the Act. Under these extra-ordinary circumstances, when the whole humanity across globe including India were suffering from Covid-19 pandemic , disease and deaths, and the lockdowns, the department ought to have taken a liberal view in condoning such default of non compliance of notice dated ITA No. 09/Agr/2024 10 30.09.2020 issued by the AO u/s 142(1) during reassessment proceedings, but it is unfortunate that the penalty of Rs.10,000/- was levied against the assessee by the AO which was later confirmed by ld. CIT(A). Keeping in view the facts and circumstances on record, I delete the penalty of Rs. 10,000/- levied by Assessing Officer against the assessee u/s 271(1)(b) vide orders dated 21.12.2021 which was later confirmed by ld. CIT(Appeals) vide appellate order dated 16.11.2023 , as the assessee has shown reasonable cause for non compliance of notice dated 30.09.2020 issued by the AO u/s 142(1) during reassessment proceedings, and the case of the assessee is covered by Section 273B read with Section 271(1)(b), as section 271(1)(b) is subject to Section 273B. The assessee succeeds in this appeal. The appeal of the assessee is allowed. I order accordingly. 7. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 11/12/2024. Sd/- (RAMIT KOCHAR) ACCOUNTANT MEMBER Dated: 11/12/2024 *aks/- Copy forwarded to: ITA No. 09/Agr/2024 11 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT Assistant Registrar ITAT Agra "