The case of Agrasar Education Ltd. Vs ITO, presided over by the Income Tax Appellate Tribunal (ITAT) Delhi, revolves around the appeal against a penalty imposed under section 272A(1)(d) of the Income Tax Act, 1961. The primary issue at hand is whether the appellant complied with a statutory notice under section 142(1) of the Act, and consequently, the legitimacy of the penalty.
In the course of assessment proceedings, the Assessing Officer (AO) issued a notice to the appellant under section 142(1) of the Act. According to the AO, the appellant did not comply with the notice, which led to the levy of a penalty under section 272A(1)(d) of the Act.
However, the appellant countered this claim, presenting evidence that they sought an adjournment through the income tax portal due to their authorized representative being preoccupied with the filing of tax audit returns. They further claimed to have furnished all the required details in due time on the portal.
In light of this evidence, the ITAT Delhi held that the appellant had complied with the statutory notice by seeking an adjournment and later providing the necessary details. This discrepancy in the interpretation of the appellant’s actions underscores the importance of clear communication and accurate record-keeping in such proceedings.
The ITAT Delhi ruled in favor of the appellant, holding that they had indeed complied with the statutory notice and therefore the levy of penalty under section 272A(1)(d) of the Act was not justifiable. This case emphasizes the criticality of understanding the flexibility provided by statutory provisions and the potential for discrepancies in interpretation when compliance is mediated through electronic modes.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal in ITA No.2362/Del/2022 for AY 2017-18 arises out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as ‘ld. CIT(A)’, in short] in DIN & Order No. ITBA/N FAC/S/250/2022-23/1045445945(1) dated 13.09.2022 against the order of assessment passed u/s 272A(1)(d) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 31.12.2021 by the National Faceless Assessment Centre, Delhi (hereinafter referred to as ‘ld. AO’).
2. The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in confirming the levy of penalty u/s 272A(1)(d) of the Act in the facts and circumstances of the case.
3. We have heard the rival submissions and perused the materials available on record. We find that pursuant to the return filed by the assessee, the same was selected for scrutiny by the ld. AO. In the course of assessment proceedings, the AO issued notice u/s 142(1) of the Act on 04.10.2019 ensuring compliance of the assessee on 09.10.2019. According to the ld. AO, the said notice was not complied with by the assessee and hence penalty u/s 272A(1)(d) of the Act was levied in the sum of Rs 10,000/-. The assessment was framed u/s 144 of the Act on 12.11.2019 determining total income of the assessee at Rs 46,02,740/- as against the returned income of Rs 1,02,740/-.
4. Before the ld. CIT(A) NFAC, it was submitted that on 09.10.2019, the assessee had sought some time in electronic mode by requesting in income tax portal, to furnish the requisite details as its authorized representative Shri K C Garg was pre-occupied with filing of tax audit returns. Later all the details called for by the AO were duly furnished in the income tax portal in electronic mode on 21.10.2019 . The ld. CIT(A) however observed that no such compliance was made by the assessee and accordingly upheld the levy of penalty u/s 272A(1)(d) of the Act. Aggrieved, the assessee is in appeal before us.
5. We find that the ld. AR had placed on record the evidence of having sought on adjournment in income tax portal on 09.10.2019 from the ld. AO by stating the reason that its authorized representative Shri K C Garg is busy with filing of tax audit returns and information called for require some time for compilation. The evidence in this regard is placed on record by the ld. AR. Moreover, the assessee had also furnished the complete details called for on 21.10.2019 before the ld. AO. Hence we hold that the assessee had indeed complied with the statutory notice u/s 142(1) of the Act on 09.10.2019 by seeking adjournment and later furnishing the requisite details on 21.10.2019. Hence there cannot be any levy of penalty u/s 272A(1)(d) of the Act for non-compliance to statutory notice dated 04.10.2019. Accordingly, the ground raised by the assessee is allowed.
6. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 09.05.2023