T.R. MARUTHI,USA vs. ITO, INTL. TAXN. WARD 2(2), CHENNAI

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ITA 2675/CHNY/2026Status: DisposedITAT Chennai20 August 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The ITAT held that the CIT(A) should have provided an opportunity to the assessee to explain the delay. The Tribunal condoned the delay and set aside the CIT(A)'s order.

What were the facts?

The assessee's appeals against penalty orders were dismissed by the CIT(A) for being filed with a delay of 8 and 12 days, without condoning the delay. The CIT(A) refused to condone the delay as no formal application was filed.

What were the issues?

Whether the CIT(A) erred in dismissing the appeals without condoning the delay and providing an opportunity to explain the delay.

Which sections of the Income-tax Act were involved?

Section 271F,Section 271AAC(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & SHRI S.R. RAGHUNATHA

Hearing: 21.07.2026Pronounced: 20.08.2026

आदेश / O R D E R PER ABY T. VARKEY, JM: These are appeals preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeal), Chennai-16, (hereinafter referred to as ‘Ld. CIT(A)’), dated 18.03.2026 for the Assessment Years (hereinafter referred to as ‘AY’) 2017-18 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

At the outset, the Ld. AR of the assessee submitted that assessee was a resident of USA during the relevant AY and accordingly non-resident for the

ITA No. 2674 & 2675/Chny/2026 (AY 2017-18) T.R. Maruthi :: 2 :: purpose of Income Tax Act. During the previous year relevant for the AY 2017-18, the assessee had purchased a flat for Rs.64,61,780/-. The AO reopened the assessment u/s.147 of the Act in March 2024 and finding no response to his notices, he passed the assessment order on 28.03.2025 making an addition u/s.69 of the Act to the tune of Rs.64,61,780/- (as unexplained investment), [which appeal is not before us]. And thereafter, the AO inter alia has levied penalty (i) u/s 271F for non-filing of return and levied penalty of Rs 5000/- and (ii) u/s.271AAC(1) of the Act on 25.09.2025 levying a penalty of Rs.4,99,172/-. The assessee aggrieved by the penalty orders of AO, preferred appeals before the Ld. CIT(A), who dismissed the appeals. The Ld CIT(A) has refused to condone the delay of eight (8) days & twelve (12) days in filing of penalty appeals against the penalties levied against the assessee. The Ld CIT(A), is noted to have refused to condone the delay in the absence of filing of application for condoning the delay before him. Hence, the assessee has filed appeal (i) ITA No.2675/Chny/2026, against the impugned action of the Ld. CIT(A) refusing to condone the delay of eight (8) days in filing of appeal u/s 271F; and (ii) the assessee has filed ITA No.2674/Chny/2026 against the action of the Ld. CIT(A) dismissing the penalty levied by the AO u/s.271AAC(1) of the Act on 25.09.2025 levying a penalty of Rs.4,99,172/- by refusing to condone the delay of twelve (12) days.

3.

According to the Ld. AR, the ITP on behalf of the assessee Shri V. Subbarayan appeared for hearing before the Ld. CIT(A) on 11.03.2026.

ITA No. 2674 & 2675/Chny/2026 (AY 2017-18) T.R. Maruthi :: 3 :: However, the Ld. CIT(A) without calling for the reason for delay of 8 days and 12 days in filing of the appeal before her has dismissed the appeals, which impugned actions are against the principle of natural justice and therefore, pleaded for one more opportunity before the Ld. CIT(A).

4.

Per contra, the Ld. DR does not want us to give one more innings to the assessee.

5.

Heard both parties and perused the records. The main grievance of the assessee is against the action of the Ld. CIT(A) dismissing the appeal filed by the assessee against levy of penalty u/s.271AAC(1) of the Act and u/s.271F of the Act without adjudicating the grounds of appeal raised by the assessee. In this context, it is noted that the Ld. CIT(A) found that the appeals have been filed before her with a delay of 12 and 8 days respectively against the penalties levied by the AO. The Ld. CIT(A) found that the assessee despite filing the appeals with a delay of 12 and 8 days respectively has not bothered to file application for condoning the delay. Hence, in the absence of application for condoning the delay, she was of the view that the assessee had no reason for filing the appeal belatedly. Hence, she dismissed the appeal finding no sufficient cause for not presenting the appeal within the time limit. We do not countenance the impugned action of the Ld. CIT(A). In case if the Ld. CIT(A) found that the assessee had not filed any reason for condoning the delay in filing of the appeal, in the interest of justice and fair play, she being a quasi-judicial authority, ought to have acted fairly and

ITA No. 2674 & 2675/Chny/2026 (AY 2017-18) T.R. Maruthi :: 4 :: directed the Ld. AR [who appeared before her (Shri V. Subbarayan) ITP on 11.03.2026] to explain the delay by filing application, which she didn’t, rather she dismissed the appeal which action we don’t countenance. Considering the averments made by the Ld. AR explaining the cause for delay in filing of appeals before Ld CIT(A), we condone the delay of 12 days in filing of the penalty appeal u/s.271AAC(1) of the Act and 8 days for condoning the delay for filing of the appeal against penalty u/s.271F of the Act. Hence, we set aside the impugned order of the Ld. CIT(A) and direct the Ld. CIT(A) to decide the grounds of appeal raised by the assessee including the issue of ex parte orders passed by the Assessing Officer. Needless to say, Ld. CIT(A) has power to set aside the ex parte orders passed by the AO. Having observed the same, the Ld. AR is directed to file all the relevant documents and written submissions before the Ld. CIT(A) to support the grounds of appeal raised before the Ld. CIT(A). The Ld. CIT(A) to pass order in accordance to law after hearing the assessee.

5.

In the result, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced on the 20th day of August, 2026, in Chennai.

Sd/- Sd/- (एस. आर. रघुनाथा) (एबी टी. वक�) (S.R.RAGHUNATHA) (ABY T. VARKEY) लेखा सद�/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER चे�नई/Chennai, �दनांक/Dated: 20th August, 2026. YS YASHVI Digitally signed by YASHVIR R SINGH Date: SINGH 2026.09.03 12:18:49 -07'00'

ITA No. 2674 & 2675/Chny/2026 (AY 2017-18) T.R. Maruthi :: 5 ::

आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

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