CEEYES ENGINEERING INDUSTRIES PVT. LTD.,TRICHY vs. DCIT, CIRCLE-1(1), TRICHY

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ITA 1409/CHNY/2026Status: DisposedITAT Chennai08 June 2026AY 2018-195 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in dismissing the appeal for non-appearance without adjudicating on merits. The Tribunal set aside the orders of the lower authorities and remitted the matter back to the CIT(A) for a decision on merits.

What were the facts?

The assessee did not file its return of income for AY 2018-19. After reopening the case, the assessee filed a return declaring income, which was accepted by the AO without additions. However, the AO initiated penalty proceedings under Section 270A for under-reporting income.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal without adjudicating on merits, and whether the penalty under Section 270A was validly levied.

Which sections of the Income-tax Act were involved?

Section 270A,Section 147,Section 148,Section 139(1),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: SHRI ABY T VARKEY & SHRI S. R. RAGHUNATHA

Hearing: 11.05.2026Pronounced: 08.06.2026

PER S. R. RAGHUNATHA, AM :

The present appeal is filed by the assessee against the order dated 10.11.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “ld.CIT(A)”), dismissing the appeal filed by the assessee against the penalty order dated 18.09.2024 passed u/s.270A of the Income Tax Act, 1961

:-2-: ITA. No:1409/Chny/2026. (hereinafter referred to as the “Act”), pertaining to Assessment Year (A.Y.) 2018-19. 2. At the threshold, we observe that there is a delay of 40 days in the filing of the present appeal by the assessee. The assessee has furnished an affidavit explaining that the assessee was not aware of any consultant and upon enquiry with its auditor, the assessee identified a consultant who assisted the assessee to file the present appeal and immediately filed the appeal on 12.03.2026. Upon perusal of the affidavit and after affording due opportunity of hearing from both parties, we are satisfied that the assessee has demonstrated sufficient and reasonable cause for not presenting the appeal within the statutory period prescribed under law. Accordingly, in the interest of justice, the delay in filing the appeal is hereby condoned, and the appeal is admitted for adjudication on merits.

3.

The brief facts of the case emanating from the records are that the assessee is a private limited company and did not file its return of income for A.Y 2018-19. Based on the information available with the department, the AO found that the assessee made various financial transactions to the tune of Rs.1,57,01,483/- as bill of entry for imports, foreign remittance, shipping bill for exports and interest other than interest on securities during the assessment year. Hence, the case was reopened u/s.147 of the Act, accordingly, a notice u/s.148 of the Act and other statutory notices were issued to the assessee and by calling for details. In response, the assessee filed its return of income for A.Y 2018-19, declaring total income of Rs.92,90,870/- and submitted its reply along with its supporting documents for verification. On perusal of documents submitted by the assessee and material available on record, the AO completed the assessment u/s.147 r.w.s 144B of the Act dated 11.03.2024 by making no addition and accepted the income declared in the return of income. However, the AO initiated the penalty proceeding u/s.270A of the Act, as the assessee had not declared the income under section 139(1) of the Act and statutory

:-3-: ITA. No:1409/Chny/2026. notices were issued. In response, the assessee submitted its explanation for consideration. On perusal of the explanation submitted by the assessee, the AO passed a penalty order u/s.270A of the Act dated 18.09.2024 by levying penalty of Rs.11,96,200/- for alleged under reporting of Income, as the assessee declared the income only in the return of income filed in response to section 148 of the Act. Aggrieved by the penalty order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC, Delhi on 19.10.2024. 4. At the outset, we observed that ld.CIT(A) has provided seven opportunities to the assessee to appear for hearings as detailed in paragraph 4 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld.CIT(A), NFAC dismissed the appeal filed by the assessee by confirming the order of the AO by passing a penalty order dated 10.11.2025. Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us.

5.

Before us, the ld.AR for the assessee submitted that the ld.CIT(A) erred in dismissing the appeal merely for non filing of detailed written submissions in response to hearing notices without adjudicating the appeal on merits. Further, the ld.AR for the assessee argued that the ld.CIT(A) failed to appreciate that the AO did not specify in the assessment order as to which clause or limb of section 270A(2) of the Act was attracted in the assessee’s case and thus, the satisfaction recorded by the AO is invalid and consequent order levying penalty is liable to be quashed. In view of the above, the ld.AR prayed to set aside the order of the ld.CIT(A) and remit the issue back to the file of ld.CIT(A) to adjudicate the appeal on merits. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the ld.CIT(A) to complete the appeal proceedings effectively.

6.

Per contra, the ld.DR fairly agreed for remitting the issue back to the ld.CIT(A).

:-4-: ITA. No:1409/Chny/2026. 7. We have heard the rival submissions perused the materials available on record and gone through the orders of the authorities. It is observed that the impugned penalty u/s.270A of the Act has been levied consequent to the assessment order passed u/s.147 r.w.s 144B of the Act dated 11.03.2024, as the assessee filed his return of income in response to notice u/s.148 of the Act by declaring the income of Rs.92,90,870/-.

8.

Further, we note that the ld.CIT(A) has passed the order dismissing the appeal of the assessee stating that the assessee had not participated in the appellate proceedings without adjudicating on mertis. However, the ld.AR submitted that the entire details along with the grounds of appeal raised before the ld.CIT(A) had been provided along with the appeal papers.

9.

In view of the above, in the interest of justice, we set aside the orders of the lower authorities in respect of the penalty proceedings and remit the matter back to the file of the ld.CIT(A) with a direction to consider the grounds of appeal filed by the assessee and decide the appeal on merits and pass a reasoned order in accordance with law, after affording reasonable opportunity of being heard to the assessee.

10.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the court on 08th June, 2026 at Chennai. (एबी टी वर्की ) (एस. आर. रघुनाथा) (ABY T VARKEY) (S. R. RAGHUNATHA) न्याययर्क सदस्य/Judicial Member लेखासदस्य/Accountant Member चेन्नई/Chennai, दिन ांक/Dated, the 08th June 2026 Devadas

:-5-: ITA. No:1409/Chny/2026. आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अपीलाथी/Appellant 2. प्रत्यथी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. ववभागीय प्रनतननधि/DR 5. गार्ा फाईल/GF

DEVADAS GOPALANACHARY GOPALANACHARY Date: 2026.06.10 14:59:58 +05'30'

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