Govindaswamy Vishnu Sankar Anand Vs ITO (ITAT Chennai)
Statutory Notice vs Reminder -Reminders Aren’t New Defaults- Only One Real Default- Penalty Overkill Corrected: ITAT Chennai Reduces 272A(1)(d) Levy
The appeal concerned penalty imposed u/s 272A(1)(d) for alleged non-compliance with three notices issued u/s 142(1). AO levied a total penalty of ₹30,000 treating each notice as a separate default, & the NFAC confirmed the levy.
Before the Tribunal, the Assessee argued that only one statutory notice was issued (dated 28.06.2023) & the subsequent two notices (04.08.2023 & 15.11.2023) were merely reminders. Therefore, at best, only one default could be said to exist, attracting penalty of ₹10,000 as per Section 272A(1).
The Tribunal examined the statutory wording of Section 272A(1)(d) & held that the penalty is leviable “for each such default”, meaning each valid statutory notice. However, on facts, the Tribunal accepted the Assessee’s submission that only one actionable default occurred with respect to the original notice, & the later communications could not multiply the penalty. Since the Assessee failed to comply with the primary statutory notice, the Tribunal held that penalty is justified only to the extent of ₹10,000. It therefore reduced the penalty from ₹30,000 to ₹10,000 & allowed the appeal.
