Case Law Details
Jayasakthi Knit Wear Vs ITO (ITAT Chennai)
In the case of Jayasakthi Knit Wear Vs ITO, the Income Tax Appellate Tribunal (ITAT) Chennai addressed an appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], NFAC, Delhi, for the assessment year 2016-17. The primary issue was the confirmation of a penalty of ₹40,000 levied under Section 271(1)(b) of the Income Tax Act, 1961, due to the assessee’s failure to respond to four notices issued by the Assessing Officer (AO). The assessee claimed that the non-compliance was due to severe business losses and subsequent depression, substantiated through an affidavit requesting leniency.
After reviewing the affidavit and considering the circumstances, the ITAT found merit in the assessee’s plea for relief. While the tribunal acknowledged the need to impose a penalty for non-compliance, it concluded that a reduced penalty of ₹10,000 would suffice in this case. Accordingly, the ITAT directed the CIT(A) to delete ₹30,000 from the penalty amount, confirming only ₹10,000 as payable.
This judgment underscores the tribunal’s consideration of genuine hardships faced by taxpayers in determining penalties. The ITAT’s partial relief balances the need for compliance with tax regulations while acknowledging the mitigating factors presented by the assessee. The appeal was thus partly allowed, with the final order pronounced on November 13, 2024, in Chennai.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), (hereinafter in short ‘the Ld.CIT(A)’), NFAC, Delhi, dated 19.04.2024 for the Assessment Year (hereinafter in short ‘AY’) 2016-17.
2. The main grievance of the assessee is against the order of the Ld.CIT(A) confirming penalty for violation of sec.271(1)(b) of the Income Tax Act, 1961 (hereinafter in short “the Act”) thereby confirming levy of penalty of Rs.40,000/- for not responding to notices (four times). The only plea of the assessee is that the assessee got into depression since the assessee suffered huge loss in the business and therefore, couldn’t respond to the notices of the AO and has filed an affidavit pleading for leniency.
3. Having gone through the contents of the affidavit, we are of the view that penalty of Rs.10,000/- would suffice for not responding to the notices and therefore, we direct the Ld.CIT(A) to delete penalty of 30,000/- and confirm penalty of Rs.10,000/-
4. In the result, appeal filed by the assessee is partly allowed.
Order pronounced on the 13th day of November, 2024, in Chennai.
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