Case Law Details
Ramabhai Kanjibhai Patel Vs DCIT (ITAT Surat)
The case of Ramabhai Kanjibhai Patel Vs DCIT (ITAT Surat) has significant implications for the levying of penalties under section 271(1)(b) of the Income Tax Act, 1961. It examine into a critical question – can a penalty under section 271(1)(b) be applied when an assessment has been completed under section 143(3)?
In the case at hand, the assessee, Ramabhai Kanjibhai Patel, had appealed against the levying of penalty under section 271(1)(b)/272A(1)(d) of the Act for assessment years 2013-14 to 2017-18. The penalty was imposed due to the assessee’s non-compliance with statutory notices, despite the completion of the assessment under section 143(3).
The assessee’s legal representative argued that the delay in submission was due to the Covid-19 pandemic and should not be deemed as default. They further stressed that the assessment order was finalized not under section 144 of the Act, but under section 143(3), and hence, the delay should not be strictly construed.
The case was analyzed in the light of previous rulings, such as Sanskruti Mega Structure Pvt. Ltd. vs DCIT, where penalties under similar circumstances were deleted. The tribunal noted that the assesse had shown a “reasonable cause” for non-compliance, referring to the challenges posed by the Covid-19 pandemic.
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