PREM CHANDRA SINGH,UNNAO vs. LD. ITO-2(4), UNNAO, UNNAO

PER KUL BHARAT, VICE PRESIDENT.:

These two appeals by the assessee, against two different penalty orders u/s 272A(1)(d) and 271F of the Income Tax Act, 1961 (“Act”, for short), pertaining to the assessment year 2017- 18. For the sake of convenience, these two appeals were heard together and are being disposed of by way of consolidated order. First, we take up the ITA. No. 113/LKW/2026, pertaining to the A.Y. 2017-18. The assessee has raised the following grounds of appeal: -

“1. That the learned CIT(A), NFAC has erred in law and on facts in confirming the penalty of Rs. 10,000/- levied under section 272A(1) (d) of the Income-tax Act, 1961 dated 14/09/2022, which is illegal, unjustified and liable to be quashed. 2. That the learned CIT(A) failed to appreciate that the mandatory condition of "failure without reasonable cause" as contemplated under

ITA. Nos. 113 & 170/LKW/2026024 Page 2 of 7 section 272A(1) (d) read with section 273B was not satisfied in the present case, and therefore the penalty is not leviable. 3. That the learned CIT(A) erred in rejecting the appellant's explanation of non-receipt and non-service of notices issued u/s 142(1), merely on presumptions, without bringing any positive evidence on record to establish valid and effective service of notices upon the appellant. 4. That the learned CIT(A) erred in law in holding that use of an incorrect/third-party email ID on the income-tax portal cannot constitute a reasonable cause, ignoring the factual position that the appellant had no actual knowledge of the notices uploaded on the portal and thus was prevented by sufficient cause from complying with the same. 5. That the learned CIT(A) failed to consider that penalty proceedings are quasi-criminal in nature and cannot be sustained merely on technical or venial defaults, especially when there was no deliberate or contumacious conduct on the part of the appellant. 6. That the learned CIT(A) erred in confirming the penalty without appreciating that the appellant came to know of the proceedings only upon receipt of manual/recovery notices and thereafter acted bona fide, which negates any allegation of wilful non-compliance. 7. That the learned CIT(A) erred in confirming the penalty ignoring the fact that the quantum reassessment itself is disputed and pending in appeal, and the alleged non-compliance is integrally connected with disputed jurisdictional and substantive issues arising out of reassessment proceedings. 8. That the learned CIT(A) failed to appreciate that no independent satisfaction was recorded by the Ld. Assessing Officer establishing deliberate default, and penalty was imposed mechanically in a time- barring manner, rendering the order bad in law. 9. That the order passed by the learned CIT(A) is contrary to the principles of natural justice, equity and fair play, and is therefore unsustainable in law. 10. That the appellant craves leave to add, alter, amend or withdraw any ground of appeal at or before the time of hearing.” 2. It is noted that the appeal is barred by limitation for 360 days. The assessee has filed an application seeking condonation of delay. Ld. Counsel for the assessee reiterated the submissions as made in the application seeking condonation of delay. It is stated that the assessee had initially entrusted the registration process on the Income Tax Portal to another person. However, the said person failed to inform the assessee about the notices issued and uploaded on the Income Tax Portal. Consequently, the assessee remained unaware of the notices and, therefore,

ITA. Nos. 113 & 170/LKW/2026024 Page 3 of 7 could not make the requisite compliance within the prescribed time. The assessee first became aware of the proceedings only when the demand notice was served upon him by the jurisdictional Assessing Officer through registered post. Thereafter, the assessee contacted his tax advisors and took all necessary steps to comply with the statutory requirements. Under the facts and circumstances of the present case, it was pleaded that a liberal view may be adopted and the impugned orders may please be set aside.

ITA. Nos. 113 & 170/LKW/2026024 Page 4 of 7 contacted his tax advisors and took all necessary steps to comply with the statutory requirements. We, therefore, respectfully following the judgment of the Hon'ble Supreme Court in the case of Collector of Land Acquisition Vs. MST. Katiji & Ors 167 ITR 471 (SC) hereby condone the delay and admit the appeal for hearing on merits.

ITA. Nos. 113 & 170/LKW/2026024 Page 5 of 7 8. We have heard the learned Representatives of both the parties and perused the material available on record. The reasons for non-compliance by the assessee is stated that the e-mail address registered on the Income Tax Portal belonged to the person who had initially undertaken the registration. The said person neither informed the assessee about the notices issued by the Department nor updated the relevant details. The explanation offered by the assessee constitutes a reasonable and bona fide cause for the default. The non-compliance cannot be said to be wilful or deliberate. Therefore, looking to the facts of the present case and the reason for non-compliance as stated by the assessee in his submissions, we are of the view that there was reasonable cause for the non-compliance by the assessee before the Assessing Officer. Accordingly, we hereby set aside the impugned order and direct the Assessing Officer to delete the penalty of Rs.10,000/- imposed upon the assessee. The grounds raised in this appeal are allowed. The appeal of the assessee in ITA. No.113/LKW/2026 is allowed.

ITA. Nos. 113 & 170/LKW/2026024 Page 6 of 7 adjudication, and the penalty being consequential could not have been sustained independently. 5. That the learned CIT(A) failed to appreciate that the additions made in the assessment order relate to receipts of educational institutions/societies managed by the appellant and not to his personal income, which vitiates the very foundation of the penalty. 6. That the learned CIT(A) erred in law in rejecting the appellant's explanation of reasonable cause for non-filing of return, without appreciating that the appellant was genuinely unaware of the electronic notices issued on the portal due to incorrect email mapping at the time of initial registration. 7. That the learned CIT(A) failed to properly apply the provisions of section 273B of the Act, under which no penalty is leviable if the assessee proves that there was reasonable cause for the failure. 8. That the learned CIT(A) erred in presuming valid service of notices merely because they were uploaded on the e-filing portal, without appreciating the factual position that the appellant had no effective knowledge of such notices and thus no real opportunity of compliance was available. 9. That the appellant craves leave to add, alter, amend or withdraw any of the above grounds of appeal at or before the time of hearing.” 10. Heard the Ld. Representatives of the parties. In this case, the impugned penalty has been imposed u/s 271F of the Act for failure to file income tax return before the due date. During the course of hearing, the learned counsel for the assessee submitted that the learned CIT(A), in the quantum proceedings, has set aside the ex parte assessment framed by the Assessing Officer by invoking the provisions of Section 144 of the Act and restored the issue to the file of the Assessing Officer for framing a fresh assessment in accordance with law. Therefore, looking to the undisputed fact that the question of validity of the impugned addition has been set aside to the Assessing Officer. The issue in the present case is qua the validity of the penalty imposed u/s 271F of the Act, on account of failure to furnish the income tax return before the end of the relevant assessment year. Considering the totality of the facts, the impugned penalty order is hereby set aside, and the issue is restored to the file of the Assessing Officer with a direction to decide the issue afresh in

ITA. Nos. 113 & 170/LKW/2026024 Page 7 of 7 accordance with law. The grounds raised by the assessee are partly allowed for statistical purposes. 11. In the result, appeal of the assessee in ITA. No.113/LKW/2026 is allowed and appeal of the assessee in ITA. No. 170/LKW/2026 is partly allowed for statistical purposes. Order pronounced in the open Court on 31/07/2026.

Sd/- Sd/- [ननखखल चौिरी] [कुल भारत] [NIKHIL CHOUDHARY] [KUL BHARAT] लेखा सदस्य/ACCOUNTANT MEMBER उपाध्यक्ष/VICE PRESIDENT DATED: 31/07/2026 Vijay Pal Singh, (Sr. PS) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard File By order //True Copy// Sr. Private Secretary