Non-Compliance of Summons issued by Income Tax Authorities: ITAT upholds Levy of Rs. 10k as Penalty

The Income Tax Appellate Tribunal (ITAT), Kolkata bench has upheld a penalty of Rs. 10,000 on the assessee for not complying with the summons issued under section 131(1) of the Income Tax Act, 1961.

Under the said provision, the penalty is leviable in case the assessee fails to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc. if the person fails to reply to the summons issue under section 131(1) of the Act either to attend to give evidence or produce books of account or other documents at a certain place and time, omits to attend or produce books of account or documents at the place or time.

The assessee, Mr. Dilip Kumar Panja has challenged the levy of penalty of Rs. 10,000/- under section 272A(1)(C) of the Act. The department imposed the penalty since the assessee did not comply to the summon issued under section 131(1) of the Act dated 05.12.2016 requiring his personal appearance on 08.12.2016 along with certain details and documents the AO made the reference to Joint Commissioner of Income Tax, Range-39 for initiation of the penalty.

Upholding the penalty order, Sri Rajpal Yadav, Vice President & Sri Manish Borad, Accountant Member observed that the assessee has not denied the fact that summon u/s 131(1) of the Act dated 05.12.2016 was issued and he did not appear on the date of hearing i.e. on 08.12.2016 and did not furnish any application stating any reasonable cause for not appearing on the given date nor requested any adjournment.

“Thus, there is a clear violation of provision of Section 131 of the Act and penalty u/s 272A(1)(C) of the Act is attracted. Further ld. AO has rightly acted as per the provision of sub-Section 3 of Section 272A of the Act by making a reference to Joint Commissioner of Income Tax for initiation of penalty and the same was levied at Rs. 10,000/- u/s 272A(1)(C) of the Act. The ground of the assessee that notice of demand u/s 156 of the Act should be under the signature of the ld. AO and not Joint Commissioner of Income Tax has no merit because the issue before us is the penalty levied u/s 272A(1)(C) of the Act,” the Tribunal said.

Sh. Anand Kumar Singh, Addl. CIT, appeared on behalf of the Revenue.