Vimal Pukhraj Jain Vs ITO (ITAT Mumbai)
Multiple Notices in Short Span + Covid Hospitalisation = Reasonable Cause: ITAT Deletes Penalty u/s 272A(1)(d)- Penalty Cannot Be Mechanical: ITAT Mumbai Quashes ₹50,000 Levy
Assessee filed an appeal before Tribunal against the order of CIT(A) wherein penalty of ₹50,000 levied u/s 272A(1)(d) was confirmed for alleged non-compliance to statutory notices. Assessee contended that delay in filing appeal of 807 days was due to genuine & bonafide reasons, as the accountant handling tax matters had left the job & new accountant later discovered that the appeal was not filed. Tribunal found the delay unintentional & condoned it.
Assessee had filed return declaring income of ₹6,92,940 for AY 2018-19. Case was selected for scrutiny & multiple notices were issued in early 2021. However, due to hospitalization for covid treatment, Assessee could not comply. AO completed assessment u/s 143(3) & simultaneously initiated penalty proceedings u/s 272A(1)(d). Despite show cause notices dated 08.04.2021 & 16.07.2021, no timely reply was filed & AO imposed penalty of ₹50,000. CIT(A) dismissed appeal holding that Assessee’s plea of hospitalization had no merit.
Before Tribunal, Assessee furnished supporting medical documents & discharge summary from Bombay Hospital proving hospitalization during the relevant period. Tribunal noted that five statutory notices were issued within a short span between 22.01.2021 & 30.03.2021, leaving insufficient time for compliance. Considering totality of circumstances & medical evidence, Tribunal held that there was a reasonable cause for non-compliance & this was not a fit case for penalty. Accordingly, Tribunal deleted the penalty of ₹50,000 imposed u/s 272A(1)(d) & allowed Assessee’s appeal.
