LAXMI NARAIN KESARWANI,DELHI vs. DCIT, CENTRAL CIRCLE-20, NEW DELHI

ITA 4432/DEL/2026Status: DisposedITAT Delhi01 October 2026AY 2020-216 pages
AI SummaryAllowed

What were the facts?

The assessee, Laxmi Narain Kesrwani, filed appeals against orders of the CIT(A) confirming penalties of Rs. 10,000/- each for assessment years 2019-20 and 2020-21, levied by the Assessing Officer (AO) under Section 272A(1)(d) of the Income-tax Act, 1961. These penalties arose from non-compliance with statutory notices issued under Section 142(1) of the Act on May 29, 2025, during reassessment proceedings initiated under Section 147. The AO passed assessment orders under Section 147 read with Section 143(3), not under Section 144. The assessee admitted non-compliance with the initial notices but argued that subsequent compliance was made, and the AO recorded this in the assessment orders. The assessee also presented instances where similar penalties were deleted or dropped in their own case and for a related individual.

What did the Tribunal hold?

The Tribunal held that the penalty levied under Section 272A(1)(d) of the Income-tax Act, 1961, was not sustainable. The Tribunal observed that while non-compliance with the initial notices dated May 29, 2025, was admitted, the assessee subsequently participated in the assessment proceedings and filed replies, which were recorded by the AO. The assessment was framed under Section 147 read with Section 143(3), not as a best judgment assessment under Section 144. The explanation provided by the assessee for the initial non-compliance (non-availability of counsel's assistant) was considered plausible, especially in light of their subsequent cooperation. The Tribunal noted that the AO had also dropped penalty proceedings in similar circumstances for the assessee and a related individual. Furthermore, Section 272A(1)(d) is subject to Section 273B, and a reasonable explanation was provided. Considering the assessee's conduct and the plausible explanation, the Tribunal ordered the deletion of the penalty of Rs. 10,000/- for each assessment year.

What were the issues?

1. Whether the penalty levied under Section 272A(1)(d) of the Income-tax Act, 1961, is sustainable for non-compliance with notices issued under Section 142(1) of the Act, when the assessee subsequently complied with the AO's requirements and the assessment was framed under Section 147 read with Section 143(3) and not under Section 144. Assessee's contentions: The assessee argued that despite initial non-compliance with the Section 142(1) notices dated May 29, 2025, due to the unavailability of their counsel's assistant, they later duly complied with all subsequent notices and filed complete replies, which were accepted by the AO. The assessment was framed under Section 143(3) read with Section 147, not ex-parte under Section 144. They relied on previous instances where similar penalties were deleted or dropped in their own case and for Mr. Vivek Kesarwani. They also cited Tribunal decisions in *Globus Infocom Limited v. DCIT* and *Modern Paper Marts Private Limited v. ITO*. Revenue's contentions: The Revenue relied on the orders of the learned CIT(A).

Which sections of the Income-tax Act were involved?

Section 272A(1)(d),Section 142(1),Section 147,Section 143(3),Section 144,Section 273B,Section 271(1)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘H’: NEW DELHI

Before: SHRI RAMIT KOCHAR & SHRI RAJ KUMAR CHAUHAN

For Appellant: Shri Pratap Gupta, CA, Shri Akhilesh Kumar Yadav
Hearing: 30.09.2026

PER RAMIT KOCHAR, AM: Both theses appeals are filed by the assessee against separate appellate order(s) passed by Learned Commissioner of Income Tax (Appeals)-27, New Delhi Delhi [CIT(A), in short) both dated 27.03.2026 in Appeal No. CIT(A), Delhi-27/10993/2018-19 and CIT(A),Delhi-27/10709/2019-20 for assessment years 2019-20 and 2020-21 respectively, confirming penalty levied by Assessing Officer(In short “AO”) u/s 272A(1)(d) of the Income-tax Act,1961(hereinafter called “the 1961 Act”) of Rs.10,000/- in each of the aforesaid assessment years , vide separate penalty orders, both dated 07.11.2025 passed by the AO u/s 272A(1)(d) of the 1961 Act (DIN:ITBA/P

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