Assessee was liable to pay penalty u/s 272A(1)(d) on the first default as thereafter, the AO could have proceeded to frame an ex-parte order – ITAT
In a recent judgment, ITAT has deleted the penalty u/s 272A(1)(d) for multiple default in non-compliance to the notice holding that assessee liable to pay penalty u/s 272A(1)(d) on the first default as thereafter, the AO could have proceeded to frame an ex-parte order.
ABCAUS Case Law Citation:
ABCAUS 3897 (2024) (03) ITAT
Section 272A(d)(1) provides that if the assessee fails to comply with a notice u/s 142(1) or u/s 143(2) or fails to comply with a direction issued under sub-section (2A) of section 142, he shall pay, by way of penalty, a sum of ten thousand rupees for each such default or failure.
In the instant case, the assessee had challenged the order passed by the CIT(A), NFAC in confirming the penalty u/s 272A(1)(d) of the Income Tax Act, 1961 (the Act) imposed by the Assessing Officer (AO).
The levy of penalty originated in the assessment order framed u/s 144 of the Act where the AO has issued five notices which were not responded by the assessee. This prompted the AO to initiate penalty proceedings u/s 272A(1)(d) of the Act for non-compliance with the notices, and for each default, the AO levied penalty of Rs. 10,000/- totaling to Rs. 50,000/-.
This action of the AO was upheld by NFAC.
Before the Tribunal, the assessee stated that only two notices were sent on the address given in the PAN data base and other notices were sent to wrong address of the assessee. Therefore, the assessee could not attend the assessment proceedings.
The Tribunal observed that as per the details, the first two notices were issued to the assessee through speed-post and the same were not returned. Though, the report mentions five notices, and the penalty had been levied for each default.
The Tribunal opined that the assessee was liable to pay the penalty on the first default. Thereafter, the AO could have proceeded to frame an ex-parte order.
Accordingly, the Tribunal directed the AO to levy a penalty of Rs. 10,000/- only and delete the balance.
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