Kartikay Nayyar vs. ACIT: Challenging a Non-compliance Penalty for AY 2011-12

Introduction

This case involves an appeal by Kartikay Nayyar against a penalty imposed by the Assessing Officer for non-compliance during the assessment year 2011-12. The penalty was challenged on the grounds that the appellant had indeed complied with the notices issued by the Income Tax Department.

Case Background

Kartikay Nayyar, represented by advocate Anil Kumar Jain, filed an appeal against the decision of the CIT(A)-27, New Delhi, which had confirmed a penalty of Rs. 10,000 imposed under section 271(1)(b) of the Income Tax Act, 1961. The penalty was for alleged failure to comply with a notice under section 142(1) of the Act.

Sequence of Events

The sequence of events leading to the penalty began with a notice under section 153A of the Act, followed by multiple notices including a critical one on October 5, 2018, for which the hearing was set on October 25, 2018. The appellant’s failure to appear led to the imposition of the penalty.

Arguments and Tribunal’s Decision

The appellant’s counsel argued that the notices were indeed complied with as income tax returns and bank statements were submitted. It was contended that the penalty was unjust because the appellant had participated in the assessment proceedings and had a reasonable cause for any non-appearance. The tribunal referenced similar cases where penalties were deleted under comparable circumstances, emphasizing the importance of considering the appellant’s compliance history and intent.

Conclusion

The tribunal, led by Judicial Member Shri Kul Bharat, concluded that the penalty for non-compliance was unjustifiably imposed and allowed the appeal. This case highlights the tribunal’s approach to penalties for non-compliance, especially when the taxpayer shows a substantial effort to comply with the tax authorities’ requirements.

The decision provides insight into the judicial processes related to non-compliance penalties and stresses the importance of detailed record-keeping and communication with tax authorities.

Kartikay Nayyar vs. ACIT: Challenging a Non-compliance Penalty for AY 2011-12