ITAT rejects penalty order under IT Act
The tribunal observed that the default was committed inadvertently for the first time
ITAT rejects penalty order under IT Act The tribunal observed that the default was committed inadvertently for the first time The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that non-compliance under the Income Tax Act, 1961 can be excusable if committed without a dishonest intention. Since the total turnover of the business of the assessee was increased...
ITAT rejects penalty order under IT Act
The tribunal observed that the default was committed inadvertently for the first time
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that non-compliance under the Income Tax Act, 1961 can be excusable if committed without a dishonest intention.
Since the total turnover of the business of the assessee was increased to Rs.1,30,57,127, he was under the obligation to get its accounts audited under the IT Act. But he failed to do so, and it resulted in the initiation of penalty proceedings by the assessing officer (AO).
The assessee claimed that being a 70-year-old senior citizen, he was under the impression that only the gain was liable to be surrendered for taxation purposes. But the AO levied a penalty of Rs.65,286. He further contended that his case had always fallen below the threshold limit for a tax audit. And due to a bona fide mistake, his accounts were not audited this time.
The tribunal observed that the default was committed for the first time for non-complying with the provisions of the IT Act.
The bench comprising N. K. Choudhry (Judicial Member) and Pradip Kumar Kedia (Accountant Member) held that the assessee was entitled to get leniency and deleted the penalty imposed by the AO and affirmed by the Commissioner.
While the appellant was represented by advocate R.S. Ahuja, the respondent was advised by advocate B.K. Singh.