Vishvas Chandrakant Karajkar Vs ITO (ITAT Pune)
ITAT Pune held that appellants’ failure to furnish information/documents during the course of pendency of re-assessment proceedings and failure to comply with notice due to COVID-19 restriction is reasonable cause, hence penalty u/s. 272A(1)(d) of the Income Tax Act not imposable.
Facts- The assessee is an individual whose case for the AY 2017-18 was reopened for assessment/reassessment u/s 147 of the Act. In the course of such proceedings, the Revenue vide notices dt. 12/12/2021 & 27/12/2021 issued u/s 142(1) of the Act called upon the assessee to furnish certain documents vis-à-vis information in connection with the assessment, however same remained unattended by the assessee.
Upon such non-compliance the AO vide notice dt. 14/01/2022 invoked the penalty provisions and finding no force in the contention of the assessee that, due to COVID-19 the requisite information/document could not be submitted by him, culminated the proceedings by imposing a penalty of ₹10,000/- for assessee’s twofold failure viz; (a) failure to supply information & comply with the former notices and (b) failure to establish reasonable cause with documentary evidences behind such non-compliance.
Appeal filed before NFAC was dismissed. Being aggrieved, the present appeal is filed.
Conclusion- Held that the appellants’ failure to furnish information/documents during the course of pendency of re-assessment proceedings prima-facie in our considered view is attributable to subsistence of COVID-19 which utterly prevented the assessee from complying with such notices effectively. The Revenue’s action in mulcting the penalty by asking the assessee to prove the reasonable cause [COVID- 19] with documentary evidence capable of suggesting non-application of mind by the tax authorities. The prevailing COVID-19 restriction/situation in view of Hon’ble Apex Court decision (supra) requires no provement. The COVID-19 restriction r.w. Hon’ble apex court order (supra) de-facto in our considered view is sufficient to form a reasonable cause for the purpose of section 273B of the Act so as to exculpate the assessee’s non-compliance from attracting any penalty u/s 272A(1)(d) of the Act.
