Kamal Kishor Patil Vs ITO (ITAT Pune)
When the Addition Disappears, Technical Penalty Should Not Survive: CA’s Failure Constituted Reasonable Cause u/s 273B
Summary: The Pune Bench of the ITAT has held that penalty u/s 272A(1)(d) for non-compliance with notices u/s 142(1) is not automatic. Where the assessee was a homemaker, entirely dependent upon professional advice, could not immediately collect the extensive documents demanded and the concerned CA failed to seek an adjournment or respond to the notices, the circumstances constituted a “reasonable cause” u/s 273B. The penalty of ₹20,000 was accordingly deleted. TaxGuru has also discussed reasonable-cause relief in the context of section 272A(1)(d) and section 142(1).
The assessee had not originally filed a return of income for AY 2019-20. Information available with the Department indicated that during FY 2018-19 she had purchased debentures of ₹10 lakh each issued by Muthoot Finance Ltd., Shriram Transport Finance Co. Ltd., Dewan Housing Finance Corporation Ltd., DHFL Vysya Housing Finance Ltd. & Tata Finance Services Ltd. The total investment appearing against the assessee’s PAN was ₹50 lakh.
Based upon this information, the AO reopened the assessment and issued a notice u/s 148. In response, the assessee filed her return of income on 05-01-2024 declaring a nominal income of ₹11,870.
