Gajanfar Ali Vs ITO (ITAT Chandigarh)
Penalty Package Broken: Six Defaults Under 142(1): ITAT Says Only First One Valid—₹50,000 Penalty Deleted- Major Penalties Sent Back- Trims 271(1)(b) & Cut Down to ₹10,000 Only
Assessee filed three appeals challenging penalties: ₹60,000 u/s 271(1)(b) for six non-compliances, ₹25,000 u/s 271A for failure to maintain books & ₹5,01,260 u/s 271(1)(c) for alleged concealment. CIT(A) dismissed all appeals in limine citing delay of 139 days without condonation.
Before Tribunal, AR pleaded for adjudication on merits, pointing out that the quantum appeal is still pending before CIT(A) & penalties u/s 271A & 271(1)(c) are directly dependent on quantum outcome.
Tribunal held that since quantum proceedings will decide the foundation, penalties u/s 271A & 271(1)(c) require reconsideration on merits. Hence, both penalties were restored to CIT(A) with a clear direction that delay should not be raised & Assessee must plead & prove its case promptly.
On 271(1)(b), Tribunal noted six defaults for non-compliance to notices u/s 142(1). Since default was recurring, ITAT held only first default warrants penalty of ₹10,000, while remaining ₹50,000 is deleted.
Thus:
- 271A & 271(1)(c) — restored to CIT(A) for fresh adjudication.
- 271(1)(b) — partly sustained at ₹10,000.
Appeals partly allowed.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
