Shankar Math Vs ITO(E) (ITAT Delhi)
Mandatory Penalty Under 272A(2)(e) Not Automatic: Communication Gap & Covid Count as Reasonable Cause -ITAT Gives Relief to Trust
Assessee, a charitable trust, was levied penalty of ₹2,42,300 u/s 272A(2)(e) @ ₹100 per day for 2,423 days’ delay in filing return, which CIT(A)/NFAC upheld.
Before Tribunal, Revenue argued that Assessee failed to show any reasonable cause. Tribunal, however, accepted that for a trust, communication lapses between management & auditor cannot be ruled out, particularly since penalty proceedings began during the Covid-19 disruption. Tribunal held that Assessee established a reasonable cause u/s 274 & that the delay was not deliberate or contumacious. Penalty was therefore unsustainable.
FULL TEXT OF THE ORDER OF ITAT DELHI
This assessee’s appeal for Assessment Year 2011-12 , arises against the CIT(A)/NFAC , Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1076066894(1) dated 07.05 .2025, in proceedings u/ s 272A(2)(e) of the Income Tax Act, 1961.
2. Heard both the parties at length. Case file perused .
3. We note at the outset that the assessee/appellant’s sole substantive ground raised during the course of hearing challenges both the learned lower authorities’ action imposing section 272A(2)(e) penalty o f Rs .2,42,300/- computed @ Rs. 100 per day for default of 2423 days in furnishing return; in the Assessing Officer’s order da ted 21.03 .2022 as upheld in the lower appellate discussion.
