ACTIVE BROTHERS,CHENNAI vs. ITO, NCW-9(1), CHENNAI

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ITA 46/CHNY/2026Status: DisposedITAT Chennai09 July 2026AY 2023-244 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 assessee's failure to respond to the earlier notices was not intentional or deliberate, as the notices were received via email without real-time alerts. Considering the prompt responses to subsequent notices, the penalty was deemed unwarranted.

What were the facts?

The assessee firm filed its return of income, which was selected for scrutiny. Notices under Section 142(1) were issued, and the assessee responded promptly to most of them. However, the assessee failed to respond to two specific notices dated 26.06.2024 and 24.07.2024.

What were the issues?

Whether a penalty under Section 272A(1)(d) is justified for non-compliance with notices when the non-compliance is not deliberate and the assessee has otherwise cooperated in the assessment proceedings.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & SHRI GAGAN GOYAL

Hearing: 10.06.2026Pronounced: 09.07.2026

आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeal)/NFAC, (hereinafter referred to as ‘Ld.CIT(A)’), Delhi, dated 20.11.2025 for AY 2017-18 arising from penalty order passed u/s 272A(1)(d) of the Income Tax Act, 1961, (hereinafter referred to as ‘the Act’).

2.

The assessee is a Firm and filed its return of income on 30.07.2023 declaring total income of Rs.15,99,870/-. Later, the return was selected for scrutiny and accordingly, statutory notice u/s.143(2) & 142(1) of the

ITA No. 46/Chny/2026 (AY 2023-24) Active Brothers :: 2 :: Act were issued from time to time through online mode requisitioning certain papers and documents. It is noted that the notice u/s.142(1) were issued on 10.12.2024 and thereafter on 15.01.2025 and the assessee had replied to the AO promptly on 14.12.2024 and 24.01.2025/07.02.2025 respectively to the aforesaid notices. Such fact is discernible from Page two of the assessment order & screenshot of which has been reproduced by the Ld.CIT(A) at Para 7.7 of the impugned order. Thereafter, the AO is noted to have framed the assessment u/s.143(3) of the Act on 20.03.2025 determining total income of Rs.2,16,98,400/- in place of assessee’s returned income of Rs.15,99,870/-. Thereafter, the AO is noted to have issued notice to the assessee for failure to comply with the notice issued u/s.142(1) of the Act dated 26.06.2024 and 24.07.2024 seeking certain information during the course of assessment proceedings. And thereafter, the AO taking note that there was no response from the assessee has imposed a penalty of Rs.20,000/- in non-compliance of notice u/s.142(1) dated 26.06.2024 and 24.07.2024 by penalty order dated 22.04.2025.

3.

Aggrieved the assessee preferred an appeal before Ld.CIT(A) who confirmed the action of the AO.

4.

Aggrieved the assessee is before this Tribunal.

5.

Heard both the parties and after perused the records. It is noted that the AO framed assessment u/s.143(3) on 20.03.2025 after acknowledging at Page two of the assessment order (refer screenshot reproduced by Ld.CIT(A) at Para 7.7 of impugned order) that pursuant to the notice issued u/s.142(1) dated 10.12.2024 and 15.01.2025, the assessee had promptly replied to the queries asked within the date of compliance given by the AO for filing of replies on 14.12.2024 and

ITA No. 46/Chny/2026 (AY 2023-24) Active Brothers :: 3 :: 24.01.2025/07.02.2025 respectively. It is further noted that the AO issued various show-cause notices on 18.02.2025 and the assessee is noted to have replied to it on 28.02.2025 and thereafter only the AO is noted to have completed the assessment on 20.03.2025 by taking into account the replies/documents filed by the assessee to his queries raised in notices u/s 142(1) of the Act. However, since the assessee didn’t respond to the notice dated 26.06.2024 & 24.07.2024, the AO issued show cause notice u/s. 274 r.w.s 272A(1) of the Act on 10.10.2024 and after considering the reply of the assessee, imposed penalty of Rs.20,000/- on 22.04.2025. In this regard, the assessee is noted to have brought to the notice of the Ld.CIT(A) that the initial notices sent by the AO on 26.06.2024 and 24.07.2024 couldn’t be answered because assessee wasn’t aware of such notices, since it came in the e-mail account of the assessee and there was no real-time alert which came in his telephone, which also prevented the assessee from perusing e-mail account. However, when he came to know that assessment proceedings were going on against him, he promptly monitored the Income-tax Portal and thereafter replied to the notices issued by the AO which fact has acknowledged by the AO (refer page 2 of assessment order) and screenshot given below:- Type of notice/ Date of notice/ Date of Response Date of Extent communication communication compliance of the Response if of given assessee received reply received/ not received Notice u/s 142(1) 10.12.2024 20.12.2024 Received 14.12.2024 Full

Notice u/s. 15.01.2025 23.01.2025 Received 24.01.2025 Full 142(1) 07.02.2025 Variation show 18.02.2025 27.02.2025 Received 28.02.2025 Full cause notice

ITA No. 46/Chny/2026 (AY 2023-24) Active Brothers :: 4 :: Hence, we find that the assessee’s plea that omission to respond to the notices on 26.06.2024 & 24.07.2024, were not intentional/deliberate. Hence, on overall consideration of relevant facts as noted supra, we are of the view that the impugned penalty levied of Rs.20,000/- is not warranted, hence, directed to be deleted. 6. In the result, the appeal of the assessee is allowed.

Order pronounced on the 09th day of July 2026, in Chennai.

Sd/- Sd/- (गगन गोयल) (एबी टी. वक�) (ABY T. VARKEY) (GAGAN GOYAL) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER चे�नई/Chennai, �दनांक/Dated: 09th July, 2026. YS 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

Digitally signed YASHVI by YASHVIR SINGH R SINGH Date: 2026.07.20 15:41:48 +05'30'

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