RAKESH BABULAL SHAH,MUMBAI vs. ITO WARD 19(3)(1), MUMBAI

PDF · subscribers
ITA 6768/MUM/2024Status: DisposedITAT Mumbai18 May 2026AY 2012-134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the order of the CIT(A) and restored the matter to the CIT(A)'s file for a fresh decision. This was done to allow the penalty appeal to be decided along with the pending quantum appeal.

What were the facts?

The assessee's income was determined at a much higher figure during reassessment proceedings. The Assessing Officer initiated penalty proceedings under Section 271(1)(b) for non-compliance with notices. The assessee had not raised any grounds regarding the penalty in their appeal before the CIT(A).

What were the issues?

Whether the penalty for non-compliance with notices should be decided along with the quantum appeal, and if the CIT(A) should reconsider the penalty in light of the pending quantum appeal.

Which sections of the Income-tax Act were involved?

Section 271(1)(b),Section 143(2),Section 142(1),Section 147,Section 250

AI-generated summary — verify with the full judgment below

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “D” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICAIL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.6768/MUM/2024 (AY: 2012-13) Rakesh Babulal Shah, Room No vs. ITO Ward 19(3)(1), Piramal Chamber, 17/18, 2nd Floor, 83 87 Keshav Mumbai-400012. Bhavan, 7th Khetwadi Lane, Mumbai-400004. PAN/GIR No: BTCPS9204E (Appellant) (Respondent) Assessee by Ms. Ridhisha Jain Revenue by Shri Umashankar Prasad (CIT DR) & Shri Annavaram Kosuri, (SR AR) Date of Hearing 18.05.2026 Date of Pronouncement 15.06.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

This appeal filed by the assessee emanates from the order passed under

section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the National Faceless

Appeal Centre [in short, ‘CIT(A)’], dated 24.10.2024 for the assessment year

(AY) 2012-13.

2.

The grounds of appeal raised by the assessee are as under:

“1. On the facts and in the circumstances of the case and in the law, the Hon'ble CIT(A) erred in confirming the penalty of Rs.30,000/- levied by the Ld. AO u/s 271(1)(b) of the Act and the reasons assigned for doing so are wrong and contrary to the provision of Income Tax and rules made there under.

2.

Your Appellant crave, leave to add, alter, amend or modify any or all grounds of appeal on or before the date of hearing.”

3.

Facts of the case, in brief, are that the assessee filed return of income for

the AY 2012-13 on 12.06.2013 declaring total income of Rs.3,44,880/-. Order u/s

143(3) r.w.s. 147 was passed on 27.12.2019 determining total income at

Rs.3,61,44,880/-. The AO has initiated penalty proceedings u/s 271(1)(b) of the

Act for non-compliance of notices u/s 143(2) and 142(1) issued by him. During the

penalty proceedings, the AO issued notices on 01.03.2021 and 01.09.2021, but

there was non-compliance on part of assessee. However, on 11.09.2021 assessee

submitted that he had not received the original assessment order for the subject

AY and he would file before the CIT(A) accordingly. The AO found that the assessee

had already file appeal before CIT(A) on 26.02.2022. The assessee had not taken

of any ground regarding initiation of penalty proceedings u/s 271(1)(b) of the Act.

Since, there were three default of the AO levied penalty of Rs.30,000/- u/s

271(1)(b) of the Act.

4.

Aggrieved by the order of AO, the assessee filed appeal before the CIT(A).

The CIT(A) has observed that the assessee has filed written submission regarding

reopening of the assessment but no explanation for non-compliance to the

notices issued u/s 142(1) or 143(2) of the Act. Since there is no reasonable cause

for non-compliance to the above notices, the CIT(A) dismissed the appeal.

5.

Aggrieved by the order of CIT(A), the assessee filed appeal before the

Tribunal. The Ld. AR submitted that the CIT(A) has not yet decided the quantum

appeal where detailed submissions have been made on all issues. Since, the appeal against the assessment is still pending before the CIT(A), he requested that

the matter may be set aside to his file so that the appeal could be decided

together with the quantum appeal.

6.

On the other hand, the Ld. Sr. DR supported the order of lower authorities. He would, however, have no objection if the matter is restored to the file of CIT(A) for fresh decision. 7. We have heard both sides and perused the materials on record. The

penalty proceedings u/s 271(1)(b) were proceeded during the re-assessment

proceedings u/s 147 of the Act. It is seen from record that notice u/s 143(2) and

two notices u/s 142(1) were issued to the assessee during the proceedings u/s

147 of the Act, which were not complied with. It is seen that the assessee has

filed appeal against the assessment order dated 27.12.2019 before the CIT(A),

which is still pending. The Ld. AR requested to set aside the instant appeal to the

file of CIT(A). The Ld. Sr. DR has no objection if the matter is restored to the file of

CIT(A). The Ld. AR submitted that all details have been filed before the CIT(A), who

could take decision on proper appreciation of facts during the proceedings

pending before him. Considering the facts of the case and submission by the

parties, we deem it proper to set aside the order of CIT(A) to his file for fresh

decision after considering the submissions of the assessee already filed before

him and any further details he may require from the assessee. The assessee is directed to file explanation and details as may be required by the CIT(A).

Accordingly, the ground is allowed for statistical purpose.

8.

In the result, the appeal of the assessee is allowed for statistical purpose.

Order is pronounced on 15.06.2026.

Sd/- Sd/- (SANDEEP GOSAIN) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER *Aniket Chand; Sr. PS MUMBAI Date: 15.06.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File

By Order Assistant Registrar ITAT, MUMBAI

More judgments on Section 271(1)(b)

All 2,912 judgments and leading authorities on Section 271(1)(b) →

Recent GST High Court judgments

Search GST case law →