VISISTH CHAY VYAPAR LIMITED,MEERUT vs. ITO,WARD-26(3), DELHI

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ITA 901/DEL/2025Status: DisposedITAT Delhi22 August 2025AY 2015-165 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal decided both sets of issues. Regarding the penalty appeals (ITA Nos. 904 & 905/DEL/2025), the Tribunal noted that while there was non-compliance, the assessment was completed under Section 147 based on the assessee's compliance with subsequent notices. Therefore, it was not justified to levy the penalty under Section 271(1)(b). The penalty was accordingly deleted, and these appeals were allowed. For the other appeals (ITA Nos. 901, 902 & 903/DEL/2025), the Tribunal found that the CIT(A) had dismissed the appeals based on a mistaken understanding that the assessee had not filed its return of income and had not deposited the tax. The Tribunal observed that the assessee had filed Form 35, clearly indicating the filing of the return and payment of self-assessment tax, thus making the appeals maintainable under Section 249(4)(b). Consequently, the Tribunal directed the CIT(A) to admit the appeals and adjudicate them on merits after providing a proper opportunity of being heard. These appeals were allowed for statistical purposes. The ratio is that penalties for non-compliance with notices under Section 142(1) may not be sustainable if the assessment is completed under Section 147 and subsequent compliance is made, and that appeals should not be dismissed for non-compliance with Section 249(4)(b) if the assessee has demonstrably filed returns and paid taxes.

What were the facts?

The assessee, M/s. Visisth Chay Vypar Limited, filed appeals before the Income Tax Appellate Tribunal (ITAT) against orders of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi. These appeals pertained to Assessment Years (AYs) 2015-16, 2016-17, and 2018-19. Specifically, appeals in ITA Nos. 904 & 905/DEL/2025 for AYs 2015-16 & 2016-17 challenged penalty orders under Section 271(1)(b) of the Income-tax Act, 1961. Appeals in ITA Nos. 901, 902 & 903/DEL/2025 for AYs 2015-16, 2016-17, and 2018-19 challenged orders of the CIT(A) which had dismissed the assessee's appeals. The penalty was levied for non-compliance with notices under Section 142(1), while the dismissal of appeals was based on the premise that the assessee had not filed its return of income and had not deposited the tax demand before filing the appeal.

What were the issues?

1. Whether the penalty levied under Section 271(1)(b) of the Income-tax Act, 1961, for non-compliance with notices under Section 142(1) is justified when the assessment was completed under Section 147 and subsequent notices were complied with? (Question of law and fact) 2. Whether the CIT(A) was justified in dismissing the assessee's appeals for AYs 2015-16, 2016-17, and 2018-19 on the grounds that the assessee had not filed its return of income and had not deposited the tax demand, when the assessee had indeed filed its return and paid self-assessment tax as indicated in Form 35? (Question of law and fact, turning on Section 249(4)(b) of the Act) Assessee's contentions: For penalty appeals (ITA Nos. 904 & 905/DEL/2025): The assessee argued that while there might have been non-compliance with earlier notices, it had complied with subsequent notices, and the assessment was completed under Section 147. Therefore, the penalty should be deleted. For other appeals (ITA Nos. 901, 902 & 903/DEL/2025): The assessee contended that the CIT(A) erred in dismissing the appeals based on a mistaken understanding. The assessee had filed its return of income and paid self-assessment tax, as evidenced by Form 35. Thus, the appeals were maintainable under Section 249(4)(b) and should be adjudicated on merits. The assessee prayed for the cases to be remitted back to the CIT(A). Revenue's contentions: For penalty appeals: The Revenue argued that the Assessing Officer was justified in levying the penalty due to the assessee's non-compliance with various notices. For other appeals: The Revenue did not controvert the facts on record.

Which sections of the Income-tax Act were involved?

Section 271(1)(b),Section 142(1),Section 147,Section 156,Section 148,Section 249(4)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘EF’: NEW DELHI

Before: SHRIS.RIFAUR RAHMAN & SHRI SUDHIR KUMAR

For Appellant: Shri Pranshu Goel, CA, Shri Aditya Gupta, Advocate
For Respondent: Shri Sanjeev Kaushal, CIT DR
Hearing: 14.08.2025

Heard together (5 matters)

ITA No.901/DEL/2025
ITA No.902/DEL/2025
ITA No.903/DEL/2025
ITA No.904/DEL/2025
ITA No.905/DEL/2025

Read from the judgment's own cause title. This page is filed under one of them.

(Assessment Year: 2016-17) (Assessment Year: 2018-19) ITA No.904/DEL/2025 (Assessment Year: 2015-16) ITA No.905/DEL/2025 (Assessment Year: 2016-17) M/s. Visisth Chay Vypar Limited, vs. ITO, Ward 26(3), C/o Kashyap & Co., Delhi. 114/214, Citi Centre, Begum Bridge Road, Meerut – 250 001 (Uttar Pradesh). (PAN : AAACV6571C) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Pranshu Goel, CA Shri Aditya Gupta, Advocate REVENUE BY : Shri Sanjeev Kaushal, CIT DR Date of Hearing : 14.08.2025 Date of Order : 22.08.2025 O R D E R to 905/DEL/2025 PER S.RIFAUR RAHMAN,ACCOUNTANT MEMBER :

1. 1. These appeals are filed by the assessee against the order of ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“ld. CIT(A)”, for short] dated 27.01.2025 for AYs 2015-16 to 2017-18. The assessee also filed appeals against the order of ld. CIT(A) dated 30.09.2024 for AYs 2015-16 & 2016-17 against the levy of penalty under section 271(1)(b) of the Income-tax Act, 1961 (for short ‘the Act’).

2. Since the issues are common and the appeals are connected, therefore, the same are heard together and being disposed off by this common order.

3. First we take up & 905/Del/2025 for AYs 2015-16 & 2016-17 against the levy of penalty u/s 271(1)(b) of the Act.

4. At the time of hearing, ld. AR of the assessee brought to our notice that the Assessing Officer has initiated the proceedings in AYs 2015-16 & 2016-17 under section 271(1)(b) of the Act and imposed the penalty of Rs.20,000/- with the finding that the assessee has not complied to various notices issued u/s 142(1) of the Act. The Assessing Officer has imposed the penalty with the observation that earlier Assessing Officer has issued the notices u/s 142(1) and served the same via email which is available with the erstwhile Assessing Officer. However, the assessee has complied to the recent notice received by it and even the Assessing Officer has completed the proceedings u/s 147 of the Act, therefore, in fact the assessee has complied with the notices received by it and prayed that the penalty may be deleted. to 905/DEL/2025 5. On the other hand, ld. DR of the Revenue submitted that considering the non-compliance of the assessee for the various notices, the Assessing Officer is justified in levying the penalty.

6.

Considered the rival submissions and material placed on record. We observe that there was non-compliance on the part of the assessee. However, we notice that the assessment was completed based on the compliance from the assessee even though, the subsequent notices issued by the present Assessing Officer were complied with. Since the assessment was completed u/s 147 of the Act, it is not justified to levy the penalty in this case. Accordingly, penalty levied u/s 271(1)(b) of the Act is deleted and appeals being & 905/Del/2025 are allowed.

7.

With regard to 902 & 903/Del/2025 are concerned, the facts are similar in all the three assessment years. Hence we are considering AY 2016-17 being ITA No.902/Del/2025 as lead case to adjudicate the same.

8.

At the time of hearing, ld. AR of the assessee brought to our notice that ld. CIT (A) has dismissed the appeal of the assessee with the observation that assessee has not filed its return of income in response to a notice issued u/s 148 of the Act and as per the assessment order passed u/s 147 of the Act, a demand was created of Rs.35,54,184/- and as per the notice issued u/s 156 of the Act with the direction to deposit the abovesaid demand. He observed that since the assessee has not deposited the demand before filing this appeal, the appeal is not maintainable u/s 249(4)(b) of the Act. He brought to 905/DEL/2025 to our notice Form 35 filed by the assessee, wherein in Column No.8, assessee has clearly indicated that assessee had filed its return of income and paid the self-assessment tax of Rs.10,05,536/-. Therefore, the case of the assessee will not fall under section 249(4)(b) of the Act and he prayed that the case of the assessee may be remitted back to the ld. CIT (A) to admit the appeal of the assessee and adjudicate the same.

9.

On the other hand, ld. DR of the Revenue did not controvert the facts on record.

10.

Considered the rival submissions and material placed on record. We observe that ld. CIT (A) has dismissed the appeal of the assessee with the mistaken understanding that assessee has not filed its return of income and also not deposited the due tax before filing the appeal. Whereas the assessee has filed the appeal with Form 35 wherein assessee has declared that assessee has already filed its return of income and also paid the due self- assessment tax. Therefore, the case of the assessee does not fall under section 249(4)(b) of the Act. Accordingly, we direct the ld. CIT (A) to admit the appeal of the assessee and adjudicate the same on merits after giving proper opportunity of being heard to the assessee.

11.

In the result, the appeal being for AY 2016-17 is allowed for statistical purposes.

12.

With regard to & 903/Del/2025, since the facts are exactly similar to ITA No.902/Del/2025 our above findings in ITA to 905/DEL/2025 No.902/Del/2025 are applicable mutatis mutandis in ITA Nos.901 & 903/Del/2025. Accordingly, the appeals filed by the assessee being ITA Nos.901 & 903/Del/2025 are allowed for statistical purposes.

13.

To sum up : assessee’s appeals being ITA Nos.901, 902 & 903/Del/2025 are allowed for statistical purposes and ITA Nos.903 & 904/Del/2025 filed by the assessee are allowed. Order pronounced in the open court on this 22nd day of August, 2025.

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