Non-Compliance Due to Notice for Seven AYs Issued in Short Period: ITAT Deletes 6 Penalties, Upholds Only One

The ITAT ruled that non-compliance due to a short notice period of seven days for issuing penalties was not intentional, and thus, the penalties for six years were deleted. However, the Tribunal upheld one penalty due to valid reasons. The taxpayer argued that a brief period to comply with notice failed to provide sufficient time for proper response, making it impossible to act in the short time frame. The decision highlights that a balance needs to be struck between the time allowed to comply and the fairness of penalty imposition. Non-intentional defaults, especially when influenced by procedural delays, were given relief in this case.