Devraj Vishwasrao Jadhav Vs ITO (ITAT Pune)
Same Question, Many Notices? ITAT Says: One Default, One Penalty – Not a Buy 1 Get 3 Free- Penalty u/s 271(1)(b) reduced – Multiple notices for same info = single default
Assessee faced a penalty under Section 271(1)(b) for alleged non-compliance with notices issued u/s 142(1) during assessment proceedings for A.Y. 2015-16. AO issued multiple notices, one after another, asking for the same information. Since Assessee did not fully comply initially, AO treated each non-compliance as a separate default & levied ₹10,000 per notice, resulting in a total penalty of ₹40,000.
Before the CIT(A), Assessee argued that it had later submitted part of the information & had reasonable cause for earlier non-appearance. However, CIT(A) confirmed the full penalty.
Tribunal carefully examined the facts & observed that although Assessee failed to comply initially, information was eventually furnished, & the assessment was completed. Therefore, this was not a case of complete non-cooperation or defiance. More importantly, the Tribunal agreed with Assessee’s legal contention that when successive notices seek the same set of information, it cannot be treated as multiple, independent defaults. It constitutes only a single continuing default, a principle already upheld in many Tribunal decisions.
ITAT also invoked Section 273B, which provides that no penalty shall be imposed if there was a reasonable cause for the failure. Considering the overall circumstances, Tribunal held that only the first default could be penalized, & there was no justification to impose penalty for subsequent notices asking for the same information.
Accordingly, ITAT restricted the penalty to one instance of non-compliance, confirming only ₹10,000 & deleting the balance ₹30,000.
In conclusion, Tribunal held that repeated issue of notices for identical information does not multiply the default. Thus, the appeal of Assessee was partly allowed, with the penalty substantially reduced.
FULL TEXT OF THE ORDER OF ITAT PUNE
