Only five days time allowed to reply questionnaire was not sufficient opportunity. ITAT deletes penalty u/s 272A(1)(d) of the Income Tax Act, 1961
ABCAUS Case Law Citation:
ABCAUS 3786 (2023) (08) ITAT
In the instant case, the assessee had challenged the order passed by the Commissioner of Income Tax (Appeals)/CIT(A) in confirming the levy of income tax penalty Rs.10,000/- u/s 272A(1)(d) of the Income Tax Act, 1961 (the Act).
During The course of the assessment proceedings, the Assessing Officer had issued notice u/s 142(1) along with questionnaire. The time given for the compliance as indicated in the notice was only five days.
The Assessing Officer taking an adverse view of the assessee’s non-compliance with aforesaid notice, initiated penalty proceedings u/s 272A(1)(d) of the Act by issuing show cause notice.
During the penalty proceedings, the assessee requested to keep the proceedings in abeyance because the assessment order was challenged by him in appeal under section 246 and the appellate order was awaited.
The Assessing Officer however passed the impugned order.
The Tribunal observed that show cause notice was issued by the Assessing Officer u/s 142(1) of the Act on 12th and the date of compliance was fixed on 18th of the same month. There were only five days between the date of issue of notice and date fixed for compliance. The assessee was required to comply with questionnaire which was sent along with aforesaid notice u/s 142(1) of the Act.
The Tribunal opined that as the assessee was required to respond to the queries contained in the questionnaire within a period of five days, provided by the Assessing Officer for compliance with the notice u/s 142(1) of the Act, it did not constitute sufficient opportunity.
The Tribunal opined that within the meaning of Section 273B of the Act, there was reasonable cause on the part of the assessee, for failure to comply with aforesaid notice issued u/s 142(1) of the Act.
In view of above the ITAT cancelled the penalty of Rs.10,000/- levied by the Assessing Officer u/s 272A(1)(b) of the Act.
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