SHANTI FAIR DEAL PRIVATE LIMITED,INDORE vs. CIT(APPEALS)-3,BHOPAL, BHOPAL

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ITA 889/IND/2025Status: DisposedITAT Indore08 May 2026AY 2022-2314 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that a penalty under Section 272A(1)(d) cannot be sustained if the assessment is completed on merits under Section 143(3) without drawing adverse inferences for non-compliance. The imposition of penalty without establishing deliberate default is not warranted.

What were the facts?

The Assessing Officer imposed penalties on several assessees for alleged non-compliance with notices issued under Section 142(1) during scrutiny assessments. However, the assessments were ultimately completed under Section 143(3) after considering the assessees' submissions.

What were the issues?

Whether penalties for non-compliance with notices are leviable when the assessment is completed on merits after considering submissions. Whether the penalty is sustainable when the assessment proceedings indicate cooperation rather than willful default.

Which sections of the Income-tax Act were involved?

Section 142(1),Section 143(3),Section 272A(1)(d)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI

For Appellant: Shri Prabhpreet Sheetal, AR
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 30.04.2026Pronounced: 08.05.2026

आदेश/ O R D E R

Per Bench:

The captioned nine (9) appeals have been filed by different assessees for

Assessment Year 2022-23, the details are as under:

ITA No. Appellant/ Impugned order Original Penalty

Assessee proceedings amount

1 878/Ind/2025 Welwet Real Order of first- Penalty order 20,000/-

Estate Pvt. Ltd. appeal dated dated

12.08.2025 19.12.2023

passed by passed by

learned CIT(A)-3, learned ACIT,

Bhopal [“Ld. Central-2,

CIT(A)”] Indore [“Ld. AO”]

u/s 272A(1)(d)

2 883/Ind/2025 Prateek Syndicate Order of first- Penalty order 30,000/-

appeal dated dated

28.08.2025 14.12.2023

passed by passed by

learned CIT(A)-3, learned ACIT,

Bhopal [“Ld. Central-2,

CIT(A)”] Indore [“Ld. AO”]

u/s 272A(1)(d)

3 884/Ind/2025 Pradeep & Order of first- Penalty order 30,000/-

Company appeal dated dated

28.08.2025 19.12.2023

passed by passed by

learned CIT(A)-3, learned ACIT,

Bhopal [“Ld. Central-2, CIT(A)”] Indore [“Ld. AO”]

u/s 272A(1)(d)

4 885/Ind/2025 Orange Infracon Order of first- Penalty order 30,000/-

Private Limited appeal dated dated

28.08.2025 14.12.2023

passed by passed by

learned CIT(A)-3, learned ACIT,

Bhopal [“Ld. Central-2,

CIT(A)”] Indore [“Ld. AO”]

u/s 272A(1)(d)

5 886/Ind/2025 BCM Realty Order of first- Penalty order 20,000/-

Private Limited appeal dated dated

28.08.2025 13.12.2023

passed by passed by

learned CIT(A)-3, learned ACIT,

Bhopal [“Ld. Central-2,

CIT(A)”] Indore [“Ld. AO”]

u/s 272A(1)(d)

6 888/Ind/2025 Maarg Realtech Order of first- Penalty order 30,000/-

LLP appeal dated dated

28.08.2025 19.12.2023

passed by passed by

learned CIT(A)-3, learned ACIT,

Bhopal [“Ld. Central-2,

CIT(A)”] Indore [“Ld. AO”]

u/s 272A(1)(d)

7 889/Ind/2025 Shanti Fair Deal Order of first- Penalty order 20,000/-

Private Limited appeal dated dated

28.08.2025 13.12.2023

passed by passed by learned CIT(A)-3, learned ACIT,

Bhopal [“Ld. Central-2,

CIT(A)”] Indore [“Ld. AO”]

u/s 272A(1)(d)

8 891/Ind/2025 Saaj Club & Order of first- Penalty order 30,000/-

Hotels Private appeal dated dated

Limited 28.08.2025 14.12.2023

passed by passed by

learned CIT(A)-3, learned ACIT, Bhopal [“Ld. Central-2,

CIT(A)”] Indore [“Ld. AO”]

u/s 272A(1)(d)

9 926/Ind/2025 Velours Nirman Order of first- Penalty order 20,000/-

Private Limited appeal dated dated

28.08.2025 19.12.2023

passed by passed by

learned CIT(A)-3, learned ACIT,

Bhopal [“Ld. Central-2,

CIT(A)”] Indore [“Ld. AO”]

u/s 272A(1)(d)

2.

In these matters, the Ld. AO has imposed penalties of the amounts as

mentioned in last column of above table, on account of the assessees’

alleged failure to comply with notices issued u/s 142(1) of the Income Tax

Act, 1961 during the course of scrutiny-assessments framed by Ld. AO.

However, the Ld. AR for assessee drew our attention to the copies of

assessment-orders placed in case files and demonstrated that in these cases,

the assessments were ultimately framed u/s 143(3) of the Act, after duly considering the submissions made by the assessee during the course of

scrutiny proceedings. It is evident from the record that the AO found no

occasion to resort to ex-parte or best judgement assessment u/s 144, which

itself is indicative of the fact that the assessee had participated in and co-

operated with assessment proceedings. The Ld. AR further brought to our

notice that in identical cases involving group concerns of assessee, the

penalties imposed by respective AOs have already been deleted by the very

same office of Ld. CIT(A). Copies of the following appellate orders were

placed before Bench for reference:

(i) Bravo Infrabuild Pvt. Ltd. – order dated 26.02.2026 in Appeal No.

CIT(A)-3/BPL/IT-10032/2021-22

(ii) Bravo Realties Private Ltd. - order dated 26.02.2026 in Appeal No.

CIT(A)-3/BPL/IT-10027/2021-22

(iii) Prasan & Company – order dated 26.02.2026 passed in Appeal No.

CIT(A)-3/BPL/IT-10024/2021-22

It was accordingly urged that the same view ought to be applied in present

appeals and the penalties be deleted.

3.

Ld. DR for revenue, though dutifully supporting the orders of the

lower authorities, was unable to controvert or distinguish the submissions

advanced by Ld. AR nor could he point out any distinguishing feature in the facts of present cases vis-à-vis the matters of group concerns already

decided by Ld. CIT(A) in favour of those concerns/assessees.

4.

We have carefully considered rival submissions of both sides and

perused the material placed on record. We find that the facts and

circumstances in present cases are identical to those in the cases of other/

group concerns referred to above, wherein the Ld. CIT(A) has already

granted relief by deleting the penalties. For the sake of ready reference, the

order passed by Ld. CIT(A) in one such case is reproduced hereunder:

5.

The position of law is well-settled that a penalty u/s 272A(1)(d) cannot be sustained where the assessment itself has been completed u/s 143(3) upon consideration of the assessee's submissions, and no adverse inference

is finally drawn by AO for non-compliance. The completion of assessment on merits clearly demonstrates that the alleged non-compliance, if any, was

neither willful nor contumacious and the very purpose of the notices stood fulfilled. In such circumstances, the mechanical imposition of penalty without establishing deliberate default on the part of the assessee is neither

warranted nor sustainable in law. That apart, there is no justification to sustain the penalties when the facts are identical to cases of group/other

concerns and the Ld. CIT(A) has already taken a consistent view to delete penalties in those assessees. Therefore, we are inclined to allow present appeals and the penalties imposed by the AO are hereby directed to be

deleted. Ordered accordingly.

6.

Resultantly, these appeals are allowed.

Order pronounced in open court on 08/05/2026

Sd/- Sd/-

(PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक/Dated : 08/05/2026 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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