GADDEPPA SANTHOSH ,BANGALORE vs. INCOME TAX OFFICER, WARD-6(2)(1), BANGALORE

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT & SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.:2534/Bang/2025 Assessment Year : 2015-2016 Gaddeppa Santhosh M/s. Guruswamy and Associates No.311,1st floor,10th main, 3rd ITO, Ward – 6(2)(1) block, Jayanagar, Bangalore Bangalore Vs. Karnataka 560011 PAN: DAFPS2841H APPELLANT RESPONDENT

Assessee by : Shri Guruswamy AR : Sri. N. Balusamy - JCIT Revenue by

Date of Hearing : 17-02-2026 Date of Pronouncement : 24-04-2026

ORDER PER PRASHANT MAHARISHI, VICE – PRESIDENT 1. ITA No. 2534/Bang/2025 is filed by Gaddeppa Santhosh (the assessee/appellant) against the appellate order passed by the National Faceless Appeal Centre, Delhi for assessment year 2015-16 dated 31st October 2025 wherein the assessee filed an appeal against the penalty order passed under Section 271(1)(b) of the Income Tax Act, 1961 (the Act) passed by the Assessment Unit Income Tax Department on 21st August 2023 was dismissed.

ITA Nos.: 2534/Bang/2025 Page 2 of 4 2. The only grievance of the assessee is that assessee has been penalized by Rs. 30,000/- for non-appearance before the learned Assessing Officer. Briefly stated the facts of the case shows that the assessee is an individual who did not file his Return of Income, but information was available that as assessee has made a cash deposit of Rs. 78,72,635/-. Accordingly, the re-opening proceedings were initiated and notice under Section 148 of the Act was issued on 31st March 2022. The assessee did not comply with the notices and therefore it resulted into re-assessment order wherein total income of the assessee was determined at Rs. 78,72,635/- being the amount of cash deposit added under Section 69A of the Act read with Section 115BBE of the Act. 3. During assessment proceedings the Assessing Officer noted that on three occasions, that is 21st September 2022, 19th October 2023 and 1st November 2022, the assessee did not comply with the notices issued under Section 142(1) of the Act. Therefore, the show cause notices were issued on 22nd February 2023 and 27th March 2023 along with the reminder on 18th April 2023 for levy of penalty u/s 271(1)(b) of the Act. The assessee did not reply to the same,however, on the virtual hearing on 9th August 2023 the assessee submitted that he has filed an appeal before the learned CIT (Appeal) against the assessment order, so penalty may not be levied. 4. The learned Assessing Officer noted that in the appeal before the learned CIT (Appeal) against the quantum proceedings assessee has not contested or raised the grounds about the initiation of penalty proceedings under Section 271(1)(b) of the Act. Further no information was also submitted of any reasonable cause under Section 273B of the Act was shown therefore the learned Assessing Officer levied penalty of Rs. 30,000/- being Rs. 10,000/- for each failure by an order dated 21st August 2023.

ITA Nos.: 2534/Bang/2025 Page 3 of 4 5. The assessee approached the learned CIT (the Appeal) wherein the assessee explained several reasons for non-appearance before the learned Assessing Officer and stated that there was a reasonable cause for failure to appear before him. The learned CIT (appeal) rejected all the contentions and confirmed the order of the learned AO. 6. Shri. Guruswamy, AR appeared and submitted a written statement containing three pages. The learned DR Sri. N. Balusamy supported the order of the learned revenue authorities. 7. We have carefully considered the rival contention and find that assessee was not a taxpayer and therefore he was not aware of the various notices issued and the assessment completed. The assessee came to know about the ex parte assessment order when he was saddled with the demand of Rs. 64,19,151/-. The assessee is in fact a pujari providing the services of traditional rituals as well as Poojas, Homas, Hawanas and Yagnas, he is also an astrologer. The assessee provides services to his various clients and receives the money in cash which is deposited into the bank account and for incurring the expenditure he is also withdrawing the cash. Therefore, it is his claim that most of his businessis cash. To meet the expenses also such as provision of salary etc. to his other pujari or team members he is also paying them in cash. As the assessee was not a taxpayer, he did not know anything about the income tax proceedings, was not having any access to the portal, he could not respond to the notices issued by the learned AO. On the merits when he preferred appeal before the learned CIT (Appeal) the issue was restored back to the file of the learned Assessing Officer in terms of the provisions of Section 251(1)(a) of the Act. In view of the above facts, we find that there is a reasonable cause for not responding to three notices issued by the ld. AO and therefore by virtue of Section 273B of the Act,the penalty under Section 271(1)(b) of the Act could not have been levied on the assessee.

ITA Nos.: 2534/Bang/2025 Page 4 of 4 8. In view of the above facts the appeal of the assessee is allowed the AO is directed to delete the penalty of Rs. 30,000/- under Section 271(1)(b) of the Act. 9. In the result, appeal of the assessee is allowed

Order pronounced in the open court on 24th April 2026.

Sd/- Sd/- (KESHAV DUBEY) (PRASHANT MAHARISHI) JUDICIAL MEMBER VICE-PRESIDENT Bangalore, Dated, the 24th April 2026. *VM* Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. CIT(A) By order

Assistant Registrar, ITAT, Bangalore