SUKHVINDER SINGH SOOD,LUCKNOW vs. INCOME TAX DEPARTMENT, NAFC

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘A’, LUCKNOW BEFORE SH. KUL BHARAT, VICE PRESIDENT AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA Nos. 83, 84 & 85/LKW/2025 A.Y. 2015-16 Sukhvinder Singh Sood vs. Income Tax Department 90/4 Chander Nagar, Alambagh, Lucknow-226005 PAN: BPXPS1044B (Appellant) (Respondent) Assessee by: None Revenue by: Sh. Amit Kumar, DR Date of hearing: 16.03.2026 Date of pronouncement: 27.05.2026 O R D E R PER NIKHIL CHOUDHARY, A.M.: These three appeals have been filed by the assessee against the orders of the ld. CIT(A), NFAC under section 250 of the Income Tax Act, 1961 on 21.05.2024, 29.07.2024 and 29.07.2024 wherein the ld. CIT(A) has dismissed the appeals of the assessee in limine, that were filed against orders passed by the Assessing Officer under sections 271(1)(b), 271(1)(c) and 147 r.w.s. 144 respectively for the A.Y. 2015-16 on 23.08.2023, 24.08.2023 and 27.02.2023 respectively. The grounds of appeal in the three appeals are as under:- ITA No.83/LKW/2025 “1. The Commissioner of Income Tax (Appeal) has erred in law and facts of the case in dismissing the appeal by holding the same inadmissibile. 2. The Commissioner of Income Tax (Appeal) has erred in law and facts of the case in not appreciating and accepting the reasons put forward by the appellant for the delay. 3. The Commissioner of Income Tax (Appeal) has erred in law and facts of the case in not adjudicating on the grounds of appeal. 1

ITA Nos. 83, 84 & 85/LKW/2025 A.Y. 2015-16 Sukhvinder Singh Sood 4. Any other grounds that may be taken up during the course of the appeal proceedings with the kind permission of the Hon'ble Bench. ITA No.84/LKW/2025 “1. The Commissioner of Income Tax (Appeal) has erred in law and facts of the case in dismissing the appeal by holding the same inadmissible. 2. The Commissioner of Income Tax (Appeal) has erred in law and facts of the case in not appreciating and accepting the reasons put forward by the appellant for the delay. 3. The Commissioner of Income Tax (Appeal) has erred in law and facts of the case in not adjudicating on the grounds of appeal. 4. Any other grounds that may be taken up during the course of the appeal proceedings with the kind permission of the Hon'ble Bench.” ITA No.85/LKW/2025 “1. The Commissioner of Income Tax (Appeal) has erred in law and facts of the case in dismissing the appeal by holding the same inadmissible. 2. The Commissioner of Income Tax (Appeal) has erred in law and facts of the case in not appreciating and accepting the reasons put forward by the appellant for the delay. 3. The Commissioner of Income Tas (Appeal) has erred in law and facts of the case in not adjudicating on the grounds of appeal. 4. Any other grounds that may be taken up during the course of the appeal proceedings with the kind permission of the Hon'ble Bench.”

ITA Nos. 83, 84 & 85/LKW/2025 A.Y. 2015-16 Sukhvinder Singh Sood had approached Sh. Brij Kishore, Advocate in July, 2024, to file appeals against the orders of the ld. CIT(A) and handed over the relevant files and orders alongwith the requisite filing fee to Sh. Brij Kishore, Advocate well within time to file the appeal. Subsequently, when the assessee visited the chambers of Sh. Brij Kishore, Advocate, he learnt that the said Advocate had passed away on 17.09.2024 and he therefore asked for his files to be given to him. Ongoing through the files, he discovered that the appeals against the orders of the ld. CIT(A) in the matter of section 147 r.w.s. 144, 271(1)(b) and 271(1)(c) had not been filed and therefore, he again approached a Chartered Accountant to file the appeal before the Hon’ble Bench. It was prayed that the delay was caused on occasion of this and that it may therefore, be condoned as it was not on account of any deliberate negligence of the assessee. We have duly considered the said petitions and affidavit filed in support of the petition and we find that the death of the counsel and the lack of knowledge of the same, would constitute sufficient cause to explain the delay in the filing of the appeal and therefore, keeping in mind the fact that a cause of substantive justice must always prevail over technical considerations as laid down by the Hon’ble Supreme Court in the case of Collector of Land Acquisition Vs. MST. Katiji & Ors (1987)167 ITR 471 (SC), we admit the appeals of the assessee for consideration on merits. 3. Since the penalty proceedings emanate out of the earlier assessment proceedings under section 147 r.w.s. 144, the same is taken up for discussion at the outset. The ld. AO records that since the assessee had neither filed a return of income under section 139 nor one in response to the notice under section 148 and the Department had received information that the assessee had entered into purchase and sale of equity shares amounting to Rs.82,15,920/- and Rs. 53,13,301/- respectively during the year and also made a deposit in cash of Rs. 60,00,000/- in State Bank of India bank account, various notices were issued to the 3

ITA Nos. 83, 84 & 85/LKW/2025 A.Y. 2015-16 Sukhvinder Singh Sood assessee to explain the aforesaid transactions. But the assessee did not file any response to these notices and therefore, after issuing the necessary show cause notice, the Assessing Officer completed the assessment of the assessee in a best judgment manner by adding the amount invested of Rs. 82,15,920/- as unexplained under section 69, an amount of 8% of the sale amount of Rs. 53,13,301/- i.e., Rs. 4,25,064/- by holding the same to be net profit and adding back a sum of Rs. 60,00,000/- by holding the sum to be unexplained money under section 69A. Accordingly, the total income of the assessee was assessed at Rs. 1,46,40,984/-. Subsequently, the ld. AO also initiated penalty proceedings against the assessee, under section 271(1)(b) for non-compliance to the notices issued under section 271(1)(b) and since he did not receive any response to the notice for penalty issued under section 274 r.w.s. 271(1)(b), he proceeded to levy the penalty of Rs. 20,000/- for such default. The ld. AO also initiated proceedings under section 271(1)(c) on account of the additions made in the assessment order and issued notices under section 274 r.w.s. 271(1)(c). But as the assessee did not make compliance to the said notices, the AO levied a penalty of Rs. 48,51,825/- upon the assessee, being 100% tax sought to be evaded as calculated on the amount of addition made in the assessment order. 4. Aggrieved with the said assessment and penalty orders, the assessee went in appeal before the ld. CIT(A). All these appeals were delayed. The assessee submitted before the ld. CIT(A) that the assessee was unaware of the proceedings launched by the Income Tax Department. He was not conversant with computers and he hardly ever locked into his account in the Income Tax website. It was due to this reason that no compliance of earlier notices issued by the Department had been made by him. The assessee did not know about the assessment order and only came to know when he received the copy of the demand recovery notice. It is only then that he 4

ITA Nos. 83, 84 & 85/LKW/2025 A.Y. 2015-16 Sukhvinder Singh Sood contacted a consultant and sent the case to the consultant for filing of the appeal. Accordingly, he prayed that the delays may be condoned. With regard to the two penalty orders, it was submitted that since the assessee was not aware of the assessment orders and failed to get proper tax legal advice, he was also unaware of the passing of the penalty orders. He only came to know about it when he received a copy of the demand recovery notice and when he approached the legal person for assistance. Accordingly, the appeals were being filed with a delay. The ld. CIT(A) considered the grounds filed by the assessee and held there existed no sufficient or good reason for condoning the inordinate delay of more than 368 days in the filing of the appeal against the assessment orders and 190 days in the filing of the orders against the orders of penalty under section 271(1)(b) and 271(1)(c). Accordingly, he dismissed all three appeals as time barred, refusing to condone the delays. 5. The assessee is aggrieved against the summary dismissal of his appeals by the ld. CIT(A) and has accordingly come before us with the reasons stated aforesaid. When the case was listed for hearing, there was no representation on behalf of the assessee. Perusal of order-sheets showed that on five previous occasions, when the case had been fixed for hearing, no one had been present on behalf of the assessee and on each occasion a notice was issued to the assessee for compliance, which had not been responded to. Therefore, in view of the failure of the assessee to respond to the various notices, we do not deem it necessary to grant further opportunity to the present his case and accordingly we proceed to decide the same on the basis of the materials on record. Sh. Amit Kumar, Sr. DR (hereinafter referred to as the ld. DR) assisted the Bench in the matter. He pointed out that the conduct of the assessee even during the appeal proceedings would demonstrate how

ITA Nos. 83, 84 & 85/LKW/2025 A.Y. 2015-16 Sukhvinder Singh Sood the assessee had been negligent and lackadaisical about the assessment and appeal proceedings. This was enough to justify the penalty levied upon the assessee under section 271(1)(b). As regards the additions made by the Assessing Officer, the ld. DR pointed out that the assessee was a non-filer and had no explanation to offer when confronted with the various notices during the period of assessment. Therefore, the additions made by the Assessing Officer was justified and because the assessee had even failed to respond to the notices issued during the penalty proceedings, there was no option for the Assessing Officer but to levy penalty under section 271(1)(c). Accordingly, he prayed that all three orders may be confirmed. 6. We have duly considered the facts and circumstances of the case. We note that the assessee has submitted before the ld. CIT(A) that he was not well-conversant with computers and for that reason was unable to respond to the various notices issued by the Department in the assessment proceeding or in the various penalty proceedings that followed. It is for this reason that he was unaware of the assessment order or the penalty orders and it was on this account that he had prayed that the delay in filing of his appeals may be condoned. However, the ld. CIT(A) did not feel the same to be a sufficient cause and refused to consider any of his appeals on its merits. While the conduct of the assessee throughout the assessment and appeal proceedings do suggest a lack of attention to the proceedings initiated by the Department and by him at various points of time, we cannot help but note that before the ld. CIT(A), the assessee had submitted that he had received a sum of Rs. 85,15,487/- on 26.09.2014 as compensation towards compulsory acquisition of land, which had been credited in his bank account maintained with State Bank of India. It was out of the same, that investment in equity shares were made during the relevant previous years through de-mat

ITA Nos. 83, 84 & 85/LKW/2025 A.Y. 2015-16 Sukhvinder Singh Sood account. It has also been submitted that the addition of Rs. 82,15,920/- had been made on account of unexplained investment in purchase of equity shares, but the same were explained by the compensation received on account of compulsory acquisition. It is also submitted that no cash had been deposited in the relevant bank account in the relevant assessment year and furthermore the addition of Rs. 4,25,064/- by calculating a net profit @ 8% had been done in an ad hoc manner without appreciating the nature of profit generated out of sale of equity shares. 7. We have duly considered these facts and we are of the opinion that in view of the non-compliance by the assessee to the assessment proceedings and the failure of the ld. CIT(A) to consider these submissions in the first appeal proceedings, the assessee has not been able to put across the facts before the Assessing Officer. Since ascertaining of these facts is essential for determining taxability in the hands of the assessee, we deem it appropriate in the interest of justice to restore the assessment to the file of the Assessing Officer for de novo consideration after obtaining compliance from the assessee. The assessee is advised and cautioned, that failure to comply with this opportunity would result in a presumption that he had no explanation to offer in the matter and this could be held against him. Accordingly, ITA No. 85/LKW/2025 is allowed for statistical purposes. Since the matter of determination of the actual income of the assessee has been restored to the file of the Assessing Officer for fresh consideration, the penalty levied under section 271(1)(c) cannot stand. Accordingly, we allow the appeal of the assessee against the levy of penalty. However, in the event that the fresh assessment proceedings reveal concealment or furnishing of inaccurate particulars of income, the Assessing Officer would be at liberty to re-initiate such proceedings on the basis of the assessment order that may

ITA Nos. 83, 84 & 85/LKW/2025 A.Y. 2015-16 Sukhvinder Singh Sood be passed. ITA No. 84/LKW/2025 is accordingly allowed. However, when we consider the non-compliance by the assessee, while we have restored the addition and penalty for concealment back to the file of the ld. CIT(A) for consideration, we would tend to agree with the ld. Sr. DR that the assessee had been negligent with regard to his tax proceedings, right throughout the assessment and appeal proceedings. When the assessment proceedings are being done in a faceless manner through the Income Tax Portal, failure to check the same and be up to date with notices etc., issued from Department, cannot be a suitable excuse to condone non-compliance. While the assessee may not be personally conversant with computers, he is expected to make arrangements through counsel or otherwise for proper monitoring and representation of his case. We, therefore, confirm the penalty of rs. 20,000/- under section 271(1)(b) and dismiss the appeal of the assessee in ITA No. 83/LKW2025.