MARIMUTHU DURAIYAN,ERODE vs. ITO, WARD-2(1), ERODE

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ITA 2693/CHNY/2026Status: DisposedITAT Chennai10 September 2026AY 2018-196 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty for non-compliance with the notice dated 22.11.2023 was condoned as the assessment was completed later. For the notice dated 17.01.2024, no prejudice was caused to the Assessing Officer as the assessment was completed after the compliance date, thus the penalty could not be levied.

What were the facts?

The assessee failed to file a return of income and did not comply with notices issued under sections 148 and 142(1) of the Income Tax Act. An ex-parte assessment was completed, and a penalty was levied for non-compliance with the notices.

What were the issues?

Whether the penalty levied for non-compliance with notices under section 142(1) was justified when the assessment was completed after the compliance dates and without prejudice to the revenue.

Which sections of the Income-tax Act were involved?

Section 148,Section 142(1),Section 272A(1)(d),Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI BENCHES, CHENNAI BENCH: D

Pronounced: 10.09.2026

आयकर अपील�य अ�धकरण, चे�नई पीठ�, चे�नई INCOME TAX APPELLATE TRIBUNAL, CHENNAI BENCHES, CHENNAI BENCH: D SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA No.2693/CHNY/2026 िनधा�रण वष�/Assessment Year: 2018-19 MARIMUTHU DURAIYAN, INCOME TAX OFFICER, 174, Sanyasipatti BO., Bhavani, Ward-2(1), Erode. Vs. Erode – 638311. अपीलाथ� Appellant ��थ� Respondent BQTPD3754Q Permanent Account Number of Assessee: अपीलाथ� �ारा/Appellant represented by: Mr. Senthil Kumar – Advocate by Virtual ��थ� �ारा/Respondent represented by: Mr. Chakraborthy – JCIT सुनवाई की तारीख / Date of conclusion of hearing: 07.08.2026 घोषणा की तारीख / Date of pronouncement: 10.09.2026 आदेश / ORDER PER INTURI RAMA RAO, ACCOUNTANT MEMBER : This appeal filed by the Assessee directed against the order of the Learned Commissioner of Income Tax(Appeal)[NFAC] dated 16.03.2026 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2018-19.

2.

The Assessee raised the following grounds of appeal : “1) The Impugned Order is bad, erroneous and unsustainable in law.

2) As the assessment itself is null and void, in view of the issue of notice under sec. 148 dt.04.04.2022 with the sanction of the PCT, who is not the appropriate authority under sec.151, after the expiry of three assessment years, the penalty levied requires deletion. 3) Without prejudice, levy of penalty of Rs.20000/-, by construing the term FOR EACH FALIURE narrowly, requires reconsideration.” 3. Briefly the facts of the case are that the appellant is an Individual. The appellant had not filed the return of income under the provisions of section 139 of the Income Tax Act, 1961 for the Assessment Year 2018-19. Based on the information that the appellant made cash deposits of Rs.53,77,650/- in the account maintained with Axis Bank during the previous year relevant to assessment year 2018-19, the Jurisdictional Assessing Officer formed an opinion that the income got escaped assessment from tax, accordingly notice u/s.148 of the Act was issued on 04.04.2022 calling upon the appellant to file the return of income. However, the appellant neither complied with notice u/s.148 of the Act, nor the notices issued u/s.142(1) of the Act. The assessment came to be completed ex-parte vide order dated 29.02.2025 at a total income of Rs.53,77,650/-. While matter stood thus, the Assessing Officer had issued a show cause notice dated 29.02.2024 passed u/s.274 r.w.s 272A(1)(d) of the Act for non-compliance of notice u/s.142(1) of the Act dated 22.11.2023 and 17.01.2024. However, the appellant had not responded to the show cause notice. Therefore, the Assessing Officer proceeded with levy of penalty of Rs.20,000/- u/s.272A(1)(d) of the Act vide order dated 12.08.2024 for the Assessment Year 2018-19.

4.

Being aggrieved by order of levy of penalty, an appeal was filed before the Learned CIT(A) who vide impugned order confirmed the action of the Assessing Officer for non- prosecution.

5.

Being aggrieved by the order of the Learned CIT(A), appellant preferred an appeal before the Tribunal. The Learned Counsel submits that the very assessment proceedings are null and void as notice u/s.148 of the Act was issued on 04.04.2022 with the prior approval of the Learned Pr.CIT, who is not an appropriate authority u/s.151 of the Act, therefore, the levy of penalty u/s.274 r.w.s 272A(1)(d) is illegal.

6.

On the other hand, the Learned Sr.DR opposed the above submissions and submits that levy of penalty u/s.272A(1)(d) of the Act is perfectly justified as the appellant had not complied with the notice issued u/s.142(1) of the Act.

7.

We heard rival submissions and perused the material available on record. The only issue that arises in the present appeal for our consideration is whether the Learned CIT(A) was justified in confirming the levy of penalty u/s.272A(1)(d) of the Act. Admittedly, there was no compliance on the part of the appellant to the notice issued u/s.142(1) of the Act pursuant to the reassessment proceedings initiated by Assessing Officer. The appellant had not even responded to the show cause notices issued u/s.274 r.w.s 272A(1)(b) of the Act. On mere perusal of the order, it is clear that the penalty u/s.272A(1)(d) of the Act has levied for non-compliance of notice issued u/s.142(1) of the Act on 22.11.2023 and 17.01.2024. However, the assessment order was came to be passed ex-parte on 29.02.2024. The very fact that the assessing authority himself has issued another notice goes to show that the lapse on the part of the appellant to comply with earlier notice u/s.142(1) of the Act dated 22.11.2023, stands condoned, therefore, the question of levy of penalty does not arise in respect of non-compliance of notice u/s.142(1) of the Act dated 22.11.2023 as non-compliance of notice u/s.142(1) of the Act dated 17.01.2024 and therefore, the question of levy of penalty for non-compliance of notice u/s.142(1) dated 22.11.2023 does not arise. As regards the levy of penalty u/s.272A(1)(d) of the Act for non-compliance of notice u/s.142(1) of the Act dated 17.01.2024, it is crystal clear that the assessment was came to be completed after lapse of nearly more than one month on 29.02.2024. Therefore, where there was no compliance to the notice u/s.142(1) of the Act dated 17.01.2024, the Assessing Officer ought to have completed the assessment on the date fixed for compliance for notice u/s.142(1) of the Act. However, the assessment came to be passed ex-parte on 29.02.2024 which means that no prejudice is caused to the Assessing Officer for non-compliance of notice u/s.142(1) of the Act, therefore, the penalty cannot be levied.

IN the circumstances, we direct the Assessing Officer to delete the penalty of Rs.20,000/-.

8.

In the result, appeal filed by the Assessee stands allowed. Order pronounced in the open Court on 10th September, 2026.

Sd/- Sd/- (GEORGE GEORGE K) (INTURI RAMA RAO) VICE PRESIDENT ACCOUNTANT MEMBER Chennai; िदनांक / Dated : 10th Sep, 2026 SGR, Sr.PS आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT Chennai/Madurai/Coimbatore/Salem. 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “डी” ब�च, चे�नई / DR, ITAT Chennai. 5. गाड� फ़ाइल / Guard File. GANGADHARA Digitally signed by GANGADHARA RAO SALEELA RAO SALEELA Date: 2026.09.17 17:49:09 +05'30'

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