No penalty under Section 272A(1)(d) when Assessment Completed u/s 143(3): ITAT Cochin

 

ITAT Cochin has held that no penalty under Section 272A(1)(d) can be imposed when the assessment was completed u/s 143(3). Here penalty under Section 272A(1)(d) was imposed for non-compliance of notice under Section 142(1) & Assessment completed under Section 143(3).

Let us have a Short Overview of the case:

The Income Tax Appellate Tribunal, Cochin Bench, deleted the penalty of ₹10,000 imposed under Section 272A(1)(d) for alleged non-compliance with a notice issued under Section 142(1). The Tribunal observed that although the Assessing Officer issued show cause notices citing initial non-compliance, the final assessment order was passed under Section 143(3) and not under best judgment assessment under Section 144. This implied that the subsequent compliance by the assessee was accepted and considered adequate by the AO. Relying on the principle laid down in Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust v. ACIT [5 DTR 429 (Del)], the Tribunal held that once the assessment is framed under Section 143(3), the default can no longer be treated as willful. It further noted that in such circumstances, the imposition of penalty was patently wrong and unjustified. The impugned order of the CIT(A)/NFAC confirming the penalty was accordingly set aside, and the AO was directed to delete the same.

Held:
Penalty u/s 272A(1)(d) cannot be sustained when the assessment is completed u/s 143(3) and the assessee has substantially complied with the statutory notices during the course of assessment proceedings.

The copy of the order is as under:

1745925640-dMmtF9-1-TO