ITAT Deletes Section 272A(1)(d) Penalty, Accepts Email Hack as Genuine Cause for Delay

The ITAT Mumbai deleted the Rs 20,000 penalty imposed under Section 272A(1)(d) of the Income-tax Act, noting a genuine reason behind the delay.

The assessee, Tarla Jagdish Chauhan, had not filed its income tax return (ITR) for the Assessment Year 2017-18. Later, the tax authorities received information that during the relevant period, the assessee had purchased an immovable property worth Rs 1.01 crore and a transaction of purchase of debentures amounting to Rs 40 lakh. As a result, the case was reopened via Section 148 Notice.

Consequently, the assessee filed its ITR, showing a very small income. During the reassessment, several notices were issued to the assessee, but she had not responded to them, which resulted in the initiation of penalty proceedings against her.

The assessee claimed that the delay was not deliberately made but was due to the hack of her email ID registered on the Income Tax Portal. Despite updating the email ID on the portal, the notices continued to be sent to the old one, which was no longer accessible. She got to be aware of the notice really late, and thereafter she furnished all relevant documents to the tax authorities.

Importantly, the tax authorities still accepted all her submissions during the assessment and completed the case without making any additions. The Tribunal noted that this was not an ex parte assessment and that the taxpayer had eventually complied with all requirements.

When the tribunal analysed the case, it noted that the delay in responding to notices was not deliberately made but was due to a genuine reason. Since the taxpayer had ultimately cooperated and her explanations were accepted, the penalty was not justified. In conclusion, the Tribunal allowed the appeal and deleted the impugned penalty.