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2023 (9) TMI 320 - ITAT MUMBAIPenalty u/s. 272A(1)(d) - non compliance to notice u/s. 142(1) - addition u/s. 68 on the ground that the assessee has failed to substantiate the source for purchase of property treating the same to be ‘unexplained credit’ - HELD THAT:- AO shall levy a penalty for each default or failure to comply with the notice u/s. 142(1) of the Act or section 143(2) of the Act or fails to comply with the direction u/s. 142(2A). Here in the present case, the A.O. has issued notice u/s. 142(1) on five occasions for furnishing the details and the documents called for by the A.O. The assessee, on the other hand, contends that he was non compliant to the said notices as it was during the Pandemic period and due to which the assessee himself was hospitalized. It is also observed that the assessee vide letter dated 03.03.2021 has furnished copies of purchase deed dated 29.09.2017 and had also made written submission subsequently. A.O. has passed the assessment order u/s. 143(3) r.w.s. 143(3A) and 143(3B) and not u/s. 144 i.e., the best judgment assessment. It is evident that the assessee has made some compliance before the A.O. and it is not a case of the complete non compliance. As it is observed that when there is a reasonable cause for the said failure, the penalty imposed u/s. 272A sub section (1) of the Act is protected as per the provision of section 273B where the penalty shall not be imposed when the assessee has substantiated reasonable cause for such failure. In the present case in hand, the notice issued u/s. 142(1) of the Act was during the Covid Pandemic period which is a justifiable cause for the non compliance before the A.O. We, therefore, deem it fit to delete the impugned penalty levied by the A.O. and, therefore, the grounds raised by the assessee are allowed.
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