No penalty for non-compliance when Assessment was made after considering reply of assessee

Hanuman Prasad & Sons Vs DCIT/ACIT/ITO (ITAT Allahabad)

In this case assessee has not only replied the notice but also replied to the letter issued by AO. After considering the reply of the assessee, the Assessing Officer framed the assessment under section 143(3) on 28^th December, 2019. Once the assessee has made the compliance though after some delay but it was well before the assessment order was framed and the penalty order dated 10.1.2022. Therefore, it is not a case of non-compliance on the part of the assessee to the notice issued under section 142(1) dated 18.11.2019 but the compliance was made belatedly. Hence, the assessee made the compliance and the assessment was framed after considering the reply and document filed by the assessee then it does not fall in the category of non-compliance by the assessee at all. Hence, in the facts and circumstances of the case when the assessee finally complied with the notice and the Assessing Officer has duly considered the reply and the documents filed by the assessee while framing the assessment, then the subsequent penalty levied by the Assessing Officer is not justified. Even otherwise, when this is the year of changing the mode of assessment proceedings from physical to digital /electronically then the delay in compliance due to change in the mode of communication and proceedings is a bonafide reasons and not deliberate. Accordingly, the penalty levied by the Assessing Officer under section 272A(1)(d) is deleted.

FULL TEXT OF THE ORDER OF ITAT ALLAHABAD

This appeal by the assessee is directed against the order dated 15.06.2022 of CIT(A) (National Faceless Appeal Centre, Delhi) arising from penalty order passed u/s 272A(1)(d) of the Act for the assessment year 2017-18. The assessee has raised the following grounds:-

“1- That in any view of the matter penalty imposed u/s 272A(1)(d) of the IT Act imposing penalty of Rs. 10,000/ vide order dated 10-01-2022 is bad both on the facts and in law.

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