APEX DETONATORS PVT LTD,NAGPUR vs. DCIT CIRCLE 2 NAGPUR, NAGPUR

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ITA 192/NAG/2026Status: DisposedITAT Nagpur15 June 2026AY 2019-207 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee's explanation for not filing the return was not asserted at any earlier stage and thus not a bonafide plea. The penalty under Section 270A was rightly invoked as the income was under-reported and the assessee failed to respond to statutory notices.

What were the facts?

The assessee failed to file its return of income for AY 2019-20 and did not respond to notices. The Assessing Officer (AO) brought to tax interest income of Rs. 8,62,624/- based on third-party information and levied a penalty under Section 270A.

What were the issues?

Whether penalty under Section 270A is justified when the assessee failed to file a return and respond to notices, despite income being detected from third-party information. Whether the assessee's belated explanation for non-filing constitutes a valid defense against penalty.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 270A,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR BENCH :: NAGPUR

Before: SHRI ANUBHAV SHARMA & SHRI KHETTRA MOHAN ROY

For Appellant: Ms. Shikha Loya, CA
For Respondent: Shri Surjit Kumar Saha, Sr.DR
Hearing: 10.06.2026Pronounced: 15.06.2026

PER KHETTRA MOHAN ROY, AM

This appeal filed by the assessee is directed against the order of National Faceless Appeal Centre, Delhi, (for short, “CIT(A)”), dated 26/12/2025 passed under section 250 of the Income Tax Act, 1961 (for short, “Act”) which is emanating from the penalty order dated 30.05.2024 passed u/s. 270A of the Act, for the Assessment Year (AY) 2019-20.

ITA No. 192/NAG/2026 (Apex Detonators Pvt. Ltd.) 2. The only effective ground raised by the assessee in this appeal is that Ld. CIT(A) erred in confirming the penalty without considering the fact that TDS was already deducted and interest thereon has already been paid.

3.

Briefly stated, the facts of the case are that the assessee did not file its return of income for AY 2019-20. The assessee also failed to file a return of income in response to the notice issued under section 148 of the Act. Based on the information available with the Department, it was noticed that interest income of Rs. 8,62,624/- had been credited/paid during the year under consideration in the bank account maintained with The Saraswat Co- operative Bank Ltd. Since the assessee remained non- responsive throughout the assessment proceedings, the Ld. AO completed the assessment under section 147 r.w.s. 144 r.w.s. 144B of the Act vide order dated 05.01.2024 by bringing to tax the aforesaid amount of Rs. 8,62,624/-. Holding the same to be a case of under-reporting of income, the Ld. AO initiated penalty proceedings under section 270A of the Act and subsequently levied a penalty of Rs. 1,34,568/-.

4.

Aggrieved by the penalty order, the assessee carried the matter in appeal before the Ld. CIT(A). The Ld. CIT(A) observed that the assessee had failed to furnish any satisfactory explanation for the under-reporting of income. 2

ITA No. 192/NAG/2026 (Apex Detonators Pvt. Ltd.) It was further noted that the assessee remained non- responsive during the penalty proceedings as well. Before the Ld. CIT(A), the assessee contended that the only source of income during the financial year 2018-19 was interest income from fixed deposits amounting to Rs. 8,62,624/-, which was duly reflected in Form No. 26AS and on which tax had already been deducted at source. However, the said explanation did not find favour with the Ld. CIT(A), who held that the assessee had failed to explain the reasons for the under-reporting of income. Accordingly, the Ld. CIT(A) upheld the action of the Ld. AO in levying penalty under section 270A amounting to Rs. 1,34,568/- and confirmed the same.

5.

Aggrieved with the order of Ld. CIT(A), assessee is in appeal before this Tribunal. Learned counsel for the assessee submitted that penalty levied under section 270A of the Act is not justified on the facts of the case. It was contended that the addition was made solely on the basis of information available with the Department regarding interest income reflected in Form No. 26AS. The assessee submitted that the interest income of Rs. 8,62,624/- was duly subjected to tax deduction at source and was fully disclosed in the information available with the Department. It was further argued that the assessee had neither concealed any particulars of income nor furnished

ITA No. 192/NAG/2026 (Apex Detonators Pvt. Ltd.) any inaccurate particulars thereof. The omission to file the return of income was neither deliberate nor with any intention to evade taxes. Therefore, the case does not fall within the ambit of misreporting of income. It was accordingly prayed that the penalty levied under section 270A of the Act be deleted. Learned counsel in support her contention, relied on the decision of Cooridnate Bench of Ahmedabad Tribunal in Parulben Vijaykumar Patel vs. ITO [2024] 163 taxmann.com 191

6.

Per contra, Learned Departmental Representative strongly supported the orders of the lower authorities. It was submitted that assessee neither filed the return of income for the relevant assessment year nor responded to the notice issued under section 148 of the Act. The assessee also failed to participate in the assessment as well as penalty proceedings. He further contended that the income was brought to tax only on the basis of third-party information available with the Department. Had the information not been available, the income would have escaped assessment. Therefore, the Assessing Officer was justified in treating the case as one of under-reporting of income and levying penalty under section 270A of the Act. The order of the Ld. CIT(A) in confirming the penalty be upheld.

ITA No. 192/NAG/2026 (Apex Detonators Pvt. Ltd.) 7. We have heard rival submissions and perused the material available on record. It is an undisputed fact that assessee did not file the return of income for the year under consideration, though such filing is onerous responsibility. The assessee also failed to furnish a return of income in response to the notice issued under section 148 of the Act. Further, the assessee remained non- compliant during the assessment proceedings as well as in the penalty proceedings. The record reveals that the income of Rs. 8,62,624/- representing interest income was brought to tax only on the basis of information available with the Department. Had such information not been available, the said income would have escaped assessment. Assessee in its written submissions has given an explanation arising out the fact that in 2001-02 management was transferred and in 2003-04 new management abruptly abandoned the company. The business was shut down and all factory assets were sold off in FY 2007-08, hence, there was no regular activity of the company. The entire accounts and other staff was relieved. Thereafter, the old promoters had tried to revive the company by merely reinvesting the FDRs amounts. Thus, there was misconception that as the only FDRs reinvested, no return was to be filed. 8. We are of the considered view that the assertions cannot be considered sufficient for the purpose of clause 5

ITA No. 192/NAG/2026 (Apex Detonators Pvt. Ltd.) (a) to section 270A(6) of the Act as the same have not been asserted at any stage earlier. Merely raising such plea at this stage, cannot be considered to be a bonafide plea. We find that the Ld. AO has levied penalty under section 270A of the Act after recording a finding that the assessee had under-reported income. Section 270A(3)(i)(b) specifically mentions that in case no return of income has been furnished, how the penalty has to be calculated by assuming i.e. unreported income. That being the case, as assessee has not responded to any of the statutory notices, the aforesaid provisions of section 270A have been rightly invoked. We do not find any infirmity in the orders of the lower authorities warranting our interference. As regards the reliance placed by the assessee on the decision of the Coordinate Bench of the Ahmedabad Tribunal in the case of Parulben Vijaykumar Patel vs. ITO [2024] 163 taxmann.com 191, we find that the facts of the said case are distinguishable from the facts of the present case. In that case, the transaction was sale of capital asset and tax was deducted at source by the purchaser u/s. 194IA of the Act, however, here there is a case of a company. Therefore, the said decision does not assist the case of the assessee as it is a blatant case of underreporting the income. In view of the foregoing discussion, we uphold the order of the Ld. CIT(A) confirming the penalty levied under section

ITA No. 192/NAG/2026 (Apex Detonators Pvt. Ltd.) 270A of the Act. Accordingly, the grounds raised by the assessee are dismissed.

8.

In the result, appeal filed by the assessee stands dismissed. Order pronounced in open Court on 15.06.2026

sd/- sd/- ANUBHAV SHARMA KHETTRA MOHAN ROY JUDICIAL MEMBER ACCOUNTANT MEMBER

Nagpur: Dated: 15/06/2026 vr/-

Copy to: 1. The Assessee 2. The Revenue 3. The Pr.CIT concerned. 4. The DR, ITAT, Nagpur 5. Guard file. By order Vukkem Digitally signed by Vukkem Rambabu Rambabu Date: 2026.06.15 18:07:12 +05'30' Senior Private Secretary ITAT, Nagpur

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