ASHOK KUMAR GUPTA,HARDOI vs. ITO-3(2), HARDOI, HARDOI

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW ‘B’ BENCH, LUCKNOW BEFORE SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA Nos. 209, 210 & 211/LKW/2026 A.Y. 2020-21 Ashok Kumar Gupta, vs. Income Tax Officer-3(2), C/o Sanjay Saxena, 12, Pratap Enclave, Hardoi Birat GT Road, Shahjahanpur, U.P. PAN: AAWPG0804G (Appellant) (Respondent) Assessee by: None Revenue by: Smt. Pratibha Singh, Addl CIT DR Date of hearing: 08.07.2026 Date of pronouncement: 30.07.2026 O R D E R PER BENCH.: These three appeals have been filed by the assessee against the order of the ld. CIT(A), wherein the ld. CIT(A) has dismissed the appeals of the assessee against the order of the Assessing Officer passed under section 143(3) r.w.s. 144B of the Income Tax Act, 1961 for the A.Y. 2020-21, vide order dated 23.09.2022 and subsequently dismissed the appeals of the assessee against levy of penalty under section 272A(1)(d) and section 270A, that had been levied by the Assessing Officer subsequent to the assessment. The grounds of appeal are as under:- ITA No.209/LKW/2026 “1. That the Id. CIT(A), NFAC erred on facts and in law in dismissing the appeal in limine without considering the grounds of appeal which is against the principle of natural justice. 2. That the Id. A.O. erred on facts and in law in passing ex-parte order because of facts assessee was not aware with the Income Tax matters and could not be able give any explanation before the ld. A.O. and the matter may kindly be remanded to the Id. Α.Ο. 1

ITA Nos.209, 210 & 211/LKW/2026 Ashok Kumar Gupta A.Y. 2020-21 3. The Id. CIT(A), NFAC had erred on facts and in law in confirming the disallowance of deduction of Rs. 39,23,635/-under section 54F of the Income Tax Act, 1961. 4. The appellant reserves a right to add/alter/amend any ground of appeal at the time of its hearing.” ITA No.210/LKW/2026 “1. That the ld. CIT(A), NFAC erred on facts and in law in dismissing the appeal in limine without considering the grounds of appeal which is against the principle of natural justice. 2. That the Id. Commissioner of Income Tax (Appeals), NFAC erred on fact of the law in confirming the penalty of Rs.16,51,156/- u/s 270A of the Income Tax Act, 1961 which is contrary to the facts and in law. 3. The appellant reserves a right to add/alter/amend any ground of appeal at the time of its hearing. ITA No.211/LKW/2026 “1. That the Id. CIT(A), NFAC erred on facts and in law in dismissing the appeal in limine without considering the grounds of appeal which is against the principle of natural justice. 2. That the ld. Commissioner of Income Tax (Appeals), NFAC erred on fact of the law in confirming the penalty of Rs.30,000/- u/s 272A(1)d of the Income Tax Act, 1961 which is contrary to the facts and in law. 3. The appellant reserves a right to add/alter/amend any ground of appeal at the time of its hearing.”

ITA Nos.209, 210 & 211/LKW/2026 Ashok Kumar Gupta A.Y. 2020-21 Kalan, Balkaganj, Lucknow”. He therefore, disallowed the claim of deduction under section 54F amounting to Rs. 39,23,835/- and brought the same to tax. Penalty proceedings were initiated under section 270A for misrepreporting of income and also under section 272A(1)(d) for the non-compliance. 3. The assessee went in appeal before the ld. CIT(A) against the orders of the AO. Before the ld. CIT(A), the assessee filed Form No. 35 in which it was submitted that the Advocate of the assessee had not cooperated in the assessment proceedings, which had resulted into the ex parte order under section 144 dated 23.09.2022. This order was never informed to the assessee and the assessee only came to know for the said order when the notice under section 221(1) of the Income Tax Act was received from ITO, Ward-3(2), Hardoi for his wife Smt. Manju Gupta (the co-owner of the property). Subsequently the assessee came to know about the proceedings and therefore, he changed his counsel and filed the appeals with a delay. The assessee appealed to the ld. CIT(A) to condone the said delay. The ld. CIT(A) did not think it in the facts and circumstances of the case to condone the delay of 1065 days holding that the same was gross, unexplained and occasioned by the assessee’s own negligence. He held that the law commands timely pursuit of legal remedies and condonation was the exception-to the rule-which was reserved for genuine and bonafide hardships which had not been substantiated in this case. Therefore, after quoting from various decisions of various Courts, the ld. CIT(A) dismissed the appeal of the assessee in limine. 4. Subsequent to the passing of the assessment order, the ld. Assessing Officer also issued a notice under section 272A(1)(d) to the asseseee. As the same was not complied with, three more show cause notices were issued to the assessee but the Assessing Officer records that none of these notices were complied with. He, therefore, held that the assessee had nothing to say in the

ITA Nos.209, 210 & 211/LKW/2026 Ashok Kumar Gupta A.Y. 2020-21 matter and the penalty under section 272A(1)(d) of the Act was leviable on account of failure of the assessee to comply with three notices issued to him under section 142(1) of the Income Tax Act. Accordingly, he levied a penalty upon the assessee for the same. The ld. Assessing Officer, after making the addition by disallowance of deduction under section 54 of the Act had also initiated penalty proceedings under section 270A for misreporting of income and when the same was not complied with, he records that he issued three more show cause notices and two PU’s but the same were not complied. Therefore, he came to the conclusion that the assessee had nothing to say in this regard. He had claimed deduction under section 54F for an agricultural land which was inadmissible in law. He had furnished incorrect facts while claiming the deduction and therefore, it was a case of misreporting his income. Therefore, he levied a penalty of Rs. 8,25,578/- in this regard on account of misreporting of income. 5. Aggrieved with these two penalty orders, the assessee filed appeals before the ld. CIT(A). Hereto, it was submitted that the ex parte assessment order and the ex parte penalty orders had been passed due to the non- cooperation of the assessee’s Advocate who had not kept the assessee informed with regard to the assessment or penalty proceedings or even about the orders which had been passed and it was only when a notice under section 221(1) was received by his wife Smt. Manju Gupta, that the assessee made enquiries and came to know that these orders had been passed. Accordingly, he filed the appeals with a condonation petition and requested the ld. CIT(A) to kindly condone the delay. 6. However, the ld. CIT(A) consistent with his stand in the appeal against the assessment proceedings, held that the delay of 907 days in filing of appeal against the order under section 272A and the delay of 921 days against the filing

ITA Nos.209, 210 & 211/LKW/2026 Ashok Kumar Gupta A.Y. 2020-21 of appeal against order of penalty under section 272A(1)(d) was entirely on account of the negligence of the assessee. Since the delay was in his opinion gross, unexplained and occasioned by the assessee’s own negligence, he refused to admit these appeals and dismissed them in limine. 7. The assessee is in appeal before us against these summary disposals of his appeals by the ld. CIT(A). On the appointed date of hearing, nobody appeared on behalf of the assessee but a written submission was filed by Sh. Pranav Pandey, C.A. (hereinafter referred to as the ld. AR), in which it was submitted that due to some technical glitches’, audio connection could not be established and his voice was not being transmitted. Accordingly, the written submission was filed through email and it was respectfully prayed that the same may kindly be taken on record and considered while deciding the appeal. It was submitted that the assessment order dated 23.09.2022 was an ex parte assessment order wherein the Assessing Officer had disallowed the assessee’s claim of exemption of Rs. 39,23,635/- under section 54F of the Income Tax Act, 1961 despite the fact that the assessee had purchased the land and constructed a residential house thereon, thereby fulfilling the conditions prescribed under the Act. It was submitted that no effective submission or supporting evidences could be furnished during the course of assessment proceedings due to the negligence and lack of presentation by the assessee’s previous counsel. For the same reason, the appeal before the ld. CIT(A) had also been filed with a delay. However, the ld. CIT(A) had dismissed the appeal in limine without considering the reasons for delay or the merits of the assessee’s claim. Therefore, the assessee had now come before the Tribunal and he prayed that in the interest of justice, the matter may kindly be restored to the file of the Assessing Officer for fresh adjudication. The ld. AR undertook to produce all relevant documentary evidence in support of the claim under section 54F which could

ITA Nos.209, 210 & 211/LKW/2026 Ashok Kumar Gupta A.Y. 2020-21 not be furnished during the original assessment proceedings in view of the aforesaid circumstances. 8. On the other hand, Smt. Pratibha Singh, Sr. DR (hereinafter referred to as the ld. DR) submitted that this was a case of gross negligence on the part of the assessee and a false claim made by him and therefore, the ld. CIT(A) was well within his power to dismiss the matter in limine. However, if the Tribunal, in its wisdom decided that the matter required restoration to the file of the Assessing Officer then she prayed that necessary directions may be issued to the assessee to make proper compliance failing which the lack of compliance could be held against the assessee. 9. We have duly considered the facts and circumstances of the case. In view of the submission made by the ld. Counsel for the assessee that the assessee had actually constructed a house on the plot of land purchased by him and met all the conditions for grant of deduction under section 54F but could not produce the necessary documentary evidence before the Assessing Officer on account of the negligence of his counsel, we deem it appropriate, that before the assessee is saddled with the tax liability, the matter requires investigation to determine the facts of the case. Accordingly, we restore this matter back to the file of the Assessing Officer and we direct the assessee to produce all relevant details in his possession that would go to establish the fact that he was eligible for the deduction under section 54F of the Income Tax Act. The ld. AO may consider such evidence and thereafter pass fresh orders in accordance with law. Accordingly, ITA No. 209/LKW/2026 is allowed for statistical purposes. 10. Since the eligibility of the assessee for deduction under section 54F has now been restored to the file of the Assessing Officer, it is premature to conclude that the assessee has misreported his income and thereby rendered himself liable for penalty under section 270A. Therefore, we delete the penalty levied 6

ITA Nos.209, 210 & 211/LKW/2026 Ashok Kumar Gupta A.Y. 2020-21 by the Assessing Officer with the comments that if the Assessing Officer were to find, after the conclusion of the fresh assessment proceedings that any such penalty is warranted, he would be free to initiate proceedings in accordance with law. With the aforesaid comments, the penalty under section 270A of Rs. 16,51,156/- is deleted and ITA No.210/LKW/2026 is held to be allowed. 11. With regard to the penalties levied upon the assessee for non- compliance of the notices under section 142(1), we noticed that in both the Form No.35 and the Form No.36, the assessee has been providing the email address of his counsels for the receipt of notices and in the circumstances, there is distinct possibility that the notices could not be complied with because the previous counsel was not cooperating with the assessee, as alleged by the assessee. However, before it can be established that he assessee was not in knowledge of the notices issue to him, it is important that the email address given in the income tax return be cross checked to determine whether these had been issued to the assessee or to his counsel. Since this exercise has not been done, we feel that it is premature to levy the penalty upon the assessee. Accordingly, we restore this matter back to the file of the Assessing Officer for conduct of such exercise and thereafter to take action as per law. Accordingly, ITA No. 211/LKW/2026 is allowed for statistical purposes. 12. In the result, while ITA No. 210/LKW/2026 is held to be allowed, ITA Nos. 209 & 211/LKW/2026 are held to be allowed for statistical purposes. Order pronounced on 30.07.2026 in the Open Court.

Sd/- Sd/- [SUDHANSHU SRIVASTAVA] [NIKHIL CHOUDHARY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30/07/2026 Sh

ITA Nos.209, 210 & 211/LKW/2026 Ashok Kumar Gupta A.Y. 2020-21 Copy forwarded to: 1. Appellant– 2. Respondent– 3. CIT DR, ITAT, 4. CIT, 5. The CIT(A) By order Sr. P.S.