Radha Soni Vs ITO (ITAT Agra)
Conclusion: Penalty imposed under section 271(1)(b) for non-compliance with a notice during the Covid-19 pandemic was deleted due to disruptions caused by lockdowns during outbreak of Covid-19 Pandemic and the Supreme Court’s extension of limitation periods.
Held: Assessee, was reassessed for the 2014-15 assessment year by AO under section 147 read with section 144. AO issued a notice under section 142(1) requesting information, but assessee did not comply. AO initiated penalty proceedings under section 271(1)(b). Despite several opportunities, assessee failed to respond, leading to a penalty of Rs. 10,000 for non-compliance. Assessee appealed to CIT (A) citing the Covid-19 pandemic as the reason for not complying with the AO’s notice dated 30.09.2020. Assessee also referred to the Supreme Court’s order and the Central Board of Direct Taxes(CBDT)’s Press Release on deadline extensions. However, CIT(A) ruled that while deadlines were extended, penalties were not exempted. Since no valid reason was shown for non-compliance, the penalty was upheld. Assessee then appealed before Tribunal. It was held that assessee had duly explained the reasonable cause for non-compliance of the notice u/s. 142(1) issued by AO during reassessment proceedings, being the period covered by outbreak of Covid-19 Pandemic when the whole humanity across the globe including India was facing the greatest human crisis and sufferings, leading to deaths , disease and severe ailments. CBDT had also extended time lines to ease compliances vide orders dated 17.09.2021. Provisions of Section 271(1)(b) are subject to provisions of Section 273B. If assessee demonstrated reasonable cause for failure to comply with notice issued u/s 142(1), assessee would be out of clutches of the penalty u/s 271(1)(b). Keeping in view the facts and circumstances on record, penalty of Rs. 10,000/- levied by AO against the assessee u/s 271(1)(b) was deleted which was later confirmed by CIT(Appeals) as assessee had shown reasonable cause for non compliance of notice issued by the AO u/s 142(1) during reassessment proceedings, and the case of the assessee was covered by Section 273B read with Section 271(1)(b), as section 271(1)(b) was subject to Section 273B.
