PARTYAKSH SHARMA,FARIDABAD vs. ITO WARD 28(1), NEW DELHI

PDF · subscribers
ITA 1813/DEL/2026Status: DisposedITAT Delhi17 July 2026AY 2017-185 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the omission to fill column 40 of Form 3CD, due to a software error and inadvertence, constituted a "reasonable cause" under Section 273B of the Income Tax Act. Therefore, the penalty levied was not sustainable.

What were the facts?

The assessee's audit report for AY 2017-18 had an unfilled column 40 in Form 3CD, leading to a penalty. The assessee claimed the omission was due to a software error and inadvertence, not malafide intention.

What were the issues?

Whether an inadvertent omission in Form 3CD due to a software error constitutes a reasonable cause for waiving a penalty under Section 273B of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 44AB,Section 250,Section 273B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A” NEW DELHI

Before: SHRI ANUBHAV SHARMA & SHRI SANJAY AWASTHI

For Appellant: Shri S.S. Nagar, Adv
For Respondent: Shri Balkrishan Gopal, Sr. DR
Hearing: 13.07.2026

ITA No.1813/DEL/2026 PARTYAKSH SHARMA IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No.1813/DEL/2026 Assessment Year: 2017-18 PARTYAKSH SHARMA, Vs. INCOME TAX OFFICER, VPO Khambi, Shraiya Mohalla, Income Tax Office, Hodal S.O. Faridabad, Ward 28(1), Room No.1214, Haryana 121106. E-2, Civic Centre, Minto Road, PAN No. DTXPS0389P New Delhi, Delhi 110002. Appellant Respondent Assessee by Shri S.S. Nagar, Adv. Revenue by Shri Balkrishan Gopal, Sr. DR Date of hearing: 13.07.2026 Pronouncement on 17.07.2026 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. The ITAT Registry has reported that the present appeal is time barred by 173 days. The assessee has filed an affidavit seeking condonation of delay as under: -

“I, Partyaksh Sharma("the appellant"), S/o Sh. Teeka Ram Sharma, aged about 34 years, presently residing at VPO Khambi, Shraiya Mohalla, Tehsil Hodal, District Palwal, Haryana, 121106 do hereby solemnly affirm and state on oath as under: 1. That the Ld. Commissioner of Income Tax (Appeals), NFAC, passed an order u/s 250 of the Income-tax Act, 1961 ("the Act") for the A.Y. 2017-18 dated 26-06-2025. 2. Pursuant to some financial disputes, the appellant changed histax consultant. Due to change in tax consultant, the appellant was not aware of the said order. The newly RAPY P10 appointed tax consultant was also not cognizant of the order. Upon review of records on the Income Tax Portal, the new tax 1

ITA No.1813/DEL/2026 PARTYAKSH SHARMA consultant discovered the order and informed the appellant that no appeal has been filed against it. Thereafter, the appellant promptly filed an appeal before the Hon'ble ITAT, Delhi resulting in a delay of 173 days (appx.). 3. That the delay in filing the present appeal before the Hon'ble ITAT, Delhi has occurred solely on account of change in tax consultant and the time taken in reviewing and compiling the complete records and facts of the case. That the delay is bona- fide, unintentional, and due to reasonable cause. 4. That the appellant had no intention whatsoever to delay the filing of the appeal or to gain an undue advantage, and no prejudice would be caused to the Revenue if the delay is condoned. 5. That it is, therefore, most respectfully prayed that Hon'ble Tribunal may kindly condone the delay in filing the present appeal in view of the sufficient cause shown hereinabove and admit the same for adjudication on merits.” 1.1 Considering the reasons given in the said affidavit, the delay is hereby condoned and the appeal is admitted for adjudication.

2.

This appeal arises from order dated 26.06.2025, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by NFAC, Delhi. In this case, the peculiar facts deserve to be briefly captured. It was noticed during assessment proceedings that the audit report filed by the assessee had an unfilled column 40 in Form 3CD. Thus, it was inferred that critical information pertaining to gross turnover, net profit, stock-in- trade, etc. was not filed by the assessee. On this basis, it was held that the statutory requirement u/s 44AB of the Act was not fulfilled. Thereafter, the impugned penalty was levied.

ITA No.1813/DEL/2026 PARTYAKSH SHARMA 2.1 The aggrieved assessee has filed the present appeal with as many as seven grounds out of which grounds 5 & 6 pertain to the oversight in omitting to file details under item 40 of Form 3CD.

3.

Before us the Ld. AR mentioned that even an affidavit was filed from the Chartered Accountant who prepared the said audit report, indicating that the details were inadvertently left out to be filled and that there was no malafide intention in doing so. The Ld. AR further stated that these facts have been captured in detail in the impugned order especially on pages 14 to 15 and again in para 7.4 at page 17 of the impugned order. It was stated that in the affidavit filed before the Ld. CIT(A) it was mentioned that due to a software error the details could not be filled out. It was the submission that even otherwise this kind of penalty is duly covered under “reasonable cause” as envisaged u/s 273B of the Act.

3.1 The Ld. DR relied on the orders of the authorities below and stated that an incomplete audit report deserved to be equated with a violation of Section 44AB of the Act. The Ld. DR supported the penalty levied and confirmed in the impugned order.

4.

We have carefully considered the rival submissions and have gone through the records before us. The dictionary meaning of “sufficient cause” would imply no negligence or in action or want of bonafides on

ITA No.1813/DEL/2026 PARTYAKSH SHARMA the part of an assessee. A review of judicial literature shows that good and sufficient cause has been described in the following case laws:

i. CIT vs. Mysore Fertilizer Co. reported in 145 ITR 91 (Mad.); ii. CIT vs. Chembara Peak Estates Ltd. reported in 183 ITR 471 (Ker.); iii. CIT vs. Jaipur Electro P. Ltd. reported in 183 ITR 476 (Raj.); and iv. CIT vs. Bhikaji Ramchandra reported 183 ITR 478 (Bom.). Considering the totality of facts and circumstances of the case, and the provisions of Section 273B of the Act, it is felt that the assessee’s case would fall within the definition of “reasonable cause” as envisaged u/s 273B of the Act and therefore the impugned penalty would certainly not be sustainable in the eyes of law.

5.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 17.07.2026 Sd/- Sd/- (ANUBHAV SHARMA) (SANJAY AWASTHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 17.07.2026 *Kavita Arora, Sr. P.S. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

ITA No.1813/DEL/2026 PARTYAKSH SHARMA ASSISTANT REGISTRAR ITAT, NEW DELHI

More judgments on Section 44AB

All 2,486 judgments and leading authorities on Section 44AB →

Recent GST High Court judgments

Search GST case law →