Sreedevi Voram Vs ITO (ITAT Hyderabad)
Penalties for Non-Compliance & Audit Delay Deleted: ITAT Hyderabad Grants Full Relief
The Hyderabad Bench of the ITAT allowed both appeals of the assessee for AY 2018-19, deleting penalties levied under sections 272A(1)(d) and 271B, holding that there was no deliberate or contumacious default and that the assessee had shown reasonable cause within the meaning of section 273B.
Penalty u/s 272A(1)(d) (Non-compliance of notices):
Although the AO levied penalty alleging non-response to notices under sections 143(2) and 142(1), the Tribunal noted that the assessment order itself recorded subsequent compliance, with the assessee filing replies and furnishing complete records (bank statements, audit report, books, GST/VAT details, etc.). Since the AO accepted the return and completed assessment after considering these details, a mere initial delay could not be treated as non-compliance. Accordingly, the penalty was deleted.
Penalty u/s 271B (Delay in audit report):
The Tribunal accepted the assessee’s explanation that she was entirely dependent on her husband (who fell seriously ill and later passed away) for running the petrol bunk, after which the business was leased out. This was also the first year the audit requirement arose. The audit report was ultimately filed during reassessment proceedings and before completion of assessment. These circumstances constituted bona fide and reasonable cause, attracting protection under section 273B. Relying on ITAT Hyderabad in Vivimed Labs Ltd., the penalty was deleted.
Accordingly, both penalties were set aside and the appeals were allowed in full.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
