Sreedevi Voram Vs ITO (ITAT Hyderabad)
Penalties Deleted as Assessee Ultimately Complied and Delay Was Due to Unavoidable Personal Circumstances
Brief Facts
- The assessee operated a petrol bunk allotted by HPCL. Due to the serious illness and subsequent demise of her husband (who managed operations), the business was leased out; income during the year comprised lease rentals.
- No return was filed initially under section 139. Subsequently, in response to notice under section 148, the assessee filed the return and furnished comprehensive records, including the audit report.
- The Assessing Officer levied penalties:
- ₹20,000 under section 272A(1)(d) for alleged non-compliance with notices under sections 143(2) and 142(1).
- ₹1,50,000 under section 271B for delay in furnishing the audit report under section 44AB.
Issues
1. Whether penalty under section 272A(1)(d) is sustainable when compliance was ultimately made and accepted before completion of assessment.
2. Whether penalty under section 271B is leviable despite a bona fide and reasonable cause for delay in filing the audit report, attracting section 273B.
Tribunal’s Findings
- Section 272A(1)(d): Although there was an initial delay, the assessee later filed detailed replies and all requisite documents (bank statements, audit report, ledgers, GST details, etc.) well before completion of assessment, which the AO accepted. Mere delay, without persistent or contumacious default, does not constitute non-compliance warranting penalty.
- Section 271B: The Tribunal accepted the assessee’s explanation—first year of audit requirement, cessation/lease of business due to husband’s illness and death, and eventual filing of audit report during reassessment—as a bona fide and reasonable cause under section 273B. Reliance was placed on prior ITAT Hyderabad precedent (Vivimed Labs Ltd.).
Decision
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