Radhey Shyam Suthar Vs DCIT (ITAT Jodhpur)
Summary: In the Jodhpur Bench of the Income Tax Appellate Tribunal (ITAT) held that penalty under Section 272A(1)(d) for non-compliance with notices issued under Section 142(1) cannot survive where the assessee subsequently furnishes complete details and the assessment is ultimately completed under Section 143(3). The assessees had initially failed to respond to certain statutory notices due to heavy workload relating to audits, return filing, and pending assessments, but later submitted detailed replies with supporting documents, which were accepted by the Assessing Officer. The Tribunal observed that the assessment orders themselves recorded satisfaction with the explanations and evidence furnished, and the returned income was accepted without adverse inference. ITAT held that once the Assessing Officer proceeds with a regular assessment after considering the subsequent compliance, the earlier defaults are deemed to have been condoned and merged into the later compliance. Since the objective of the notices stood fulfilled and no prejudice was caused to the Revenue, levy of penalty was unjustified. Relying on the decision in Ramabhai Kanjibhai Patel v. DCIT, the Tribunal directed deletion of the ₹10,000 penalty in all connected appeals.
Core Issue. The issue before the Tribunal was whether penalty of ₹10,000 under section 272A(1)(d) for initial non-compliance with notices under section 142(1) was sustainable when the assessees later submitted detailed replies with supporting documents, those replies were accepted by the Assessing Officer, and assessments were completed under section 143(3) without adverse inference.
