Facts of the Case

The assessee, Hanuman Prasad & Sons, was subjected to assessment proceedings during which notices under Section 142(1) of the Income-tax Act were issued by the Assessing Officer seeking information and documents.

The assessee did not respond within the stipulated time but subsequently furnished the required details before the assessment was finalized.

Despite such compliance, the Assessing Officer levied penalty under Section 272A(1)(d) for alleged failure to comply with statutory notices. The CIT(A) upheld the penalty, leading the assessee to file an appeal before the ITAT.

Issues Involved

  1. Whether penalty under Section 272A(1)(d) is leviable where compliance with notice under Section 142(1) is made belatedly but before completion of assessment.
  2. Whether delayed compliance can be equated with total non-compliance for the purpose of penalty.

Petitioner’s (Assessee’s) Arguments

  • The assessee contended that there was no deliberate or willful default.
  • All required information was ultimately furnished before the assessment order was passed.
  • The delay was not intended to obstruct proceedings.
  • Penalty provisions should not be invoked in cases of substantial compliance.

 Respondent’s (Revenue’s) Arguments

  • The Revenue argued that failure to comply within the prescribed time constituted default.
  • Penalty under Section 272A(1)(d) is attracted for non-compliance with statutory notices.
  • The Assessing Officer’s action was justified based on the delay.

Court Findings / ITAT Order

  • The assessee had indeed furnished the required information, though after some delay.
  • Compliance was made before completion of assessment and before passing of the penalty order.
  • The case did not involve absolute non-compliance but only delayed compliance.

Important Clarification by ITAT

Belated compliance with statutory notices cannot automatically be treated as non-compliance for the purpose of imposing penalty, particularly when the information is furnished before completion of assessment proceedings.

Link to download the order -   https://itat.gov.in/public/files/upload/1663071793-ITA%20No.%2020%20Alld%202022%20Hanuman%20Prasad%20&%20Sons.pdf

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