ASHOK KUMAR SRIVASTAVA,SONEBHADRA vs. NATIONAL FACELESS ASSESSMENT CENTER, DELHI

PER ANADEE NATH MISSHRA:A.M.

(A) This appeal has been filed by the assessee against the impugned appellate order dated 29.05.2024 passed by the National Faceless Appeal Centre (NFAC), Delhi for Assessment Year (AY) 2017-18. The assessee has raised the following grounds of appeal:

“1- That on the facts and in law, the Ld AO was not justified in imposing a penalty of Rs, 1,50,000/- U/s 271B on 11-01-2022 when penalty proceeding U/s 271A (1)(d) were dropped on 28-12-2021 for non compliance of notices issued U/s 142(1) of the Act. 2- That because the Ld AO was aware about mental illness of the appellant, the appellants case was covered within the purview of section 273B of the Act, imposition of penalty is unjustified.

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3- That the Ld AO was not justified in imposing the impugned penalty on a different ground for not furnishing the audit report in time when in fact the penalty proceedings were initiated for not getting the accounts audited. Support is derived from case of CIT vs ECO Project P Ltd Appeal no 62/2000 dt 25.07.2014(HC Allahabad) 4. That the initiation of penalty proceeding Us 271B by the Ld AO without recoding his satisfaction in the assessment order is bad in law and therefore penalty imposed by the Ld AO at Rs. 150000/- is liable to be cancelled. CIT Vs ECC Project Pvt. Ltd. (2015) 374ITR 44(All. 5. That on the facts and in law, supported by appellants affidavit dated 07- 01-2022, the Ld CIT (A) was not justified in confirming the imposition of penalty by the Ld AO at Rs. 1,50,000/- U/s 271B of the Act, the same may kindly be cancelled and justice be done.”

(B) The only issue in dispute is in this appeal is regarding the penalty amounting to Rs. 1,50,000/- levied under section 271B of the Income Tax Act, 1961 (the Act). The assessee’s appeal against the levy of penalty was dismissed by the learned CIT(A) vide impugned order of learned CIT(A). The present appeal has been filed by the assessee against the impugned order of learned CIT(A). On perusal of the grounds of appeal, it is found that the assessee has contended in ground no. 2 of appeal that the assessee’s case was covered by section 273B of the Act because of mental illness of the assessee. The relevant discussion is in paragraph 16.0 of the impugned order of the learned CIT(A). The learned CIT(A) has rejected the health ground taken by the assessee, stating that the assessee did not adduce any evidence in support of existence of adverse health conditions. The learned CIT(A) has also expressed doubt how the assessee could have continued his business in the condition of mental illness. At the time of hearing, there was no representation from the assessee’s side. The learned Departmental Representative supported the impugned order of learned CIT(A). However, it is found that the assessee did not get reasonable opportunity to explain the position regarding his

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condition of health during the appellate proceedings before the learned CIT(A). Further, it is found that the assessee did not get reasonable opportunity during the penalty proceedings before the Assessing Officer under section 271B of the Act.

(C) In view of the foregoing, the impugned appellate order of the learned CIT(A) is and the dispute regarding levy of penalty under section 271B of the Act is restored back to the file of the Assessing Officer with the direction to pass denovo order in accordance with law after providing reasonable opportunity to the assessee.

(D) In the result, the appeal of assessee is partly allowed.

(Order was pronounced in the open court on 08/07/2026.)

Sd/- (ANADEE NATH MISSHRA) Accountant Member Date: 08/07/2026 SK, Sr.PS

Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. D.R., I.T.A.T., 5. CIT(A) Senior Private Secretary Income Tax Appellate Tribunal Lucknow