CHANDRAKANT BABALDAS PATEL,PATAN vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 8(1),, MUMBAI

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ITA 6402/MUM/2026Status: DisposedITAT Mumbai21 September 2026AY 2015-165 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had reasonable cause for the failure to comply with the notices issued under section 142(1) of the Act, thereby attracting the protection of section 273B. The Tribunal noted that the explanation provided by the assessee regarding his lack of awareness and the circumstances surrounding the operation of his e-filing account was considered by a coordinate bench in quantum proceedings, which condoned the delay in filing appeals. Although condonation of delay does not automatically lead to penalty deletion, the Tribunal found these circumstances to be relevant evidence for establishing reasonable cause. The Tribunal observed that nothing was brought on record to suggest that the assessee's explanation was false or that the non-compliance was deliberate or contumacious. Furthermore, the Tribunal noted that in the assessee's own case, a coordinate bench had cancelled penalties levied under section 271(1)(b) on identical facts for other assessment years. Respectfully following that decision and independently considering the reasonable cause established, the Tribunal deleted the penalties levied under section 271(1)(b) and sustained by the learned CIT(A). The grounds raised by the assessee in all appeals were allowed.

What were the facts?

The assessee, Chandrakant Babaldas Patel, filed five appeals against the common order dated 17.11.2025 passed by the learned CIT(A)-47, Mumbai. The appeals pertained to assessment years 2014-15, 2015-16, and 2016-17. The impugned orders confirmed penalties levied by the Assessing Officer under section 271(1)(b) of the Income-tax Act, 1961, for non-compliance with notices issued under section 142(1). The assessments were completed ex parte under section 144. The assessee's appeals against the assessment orders were dismissed as time-barred by the CIT(A). A coordinate bench of the Tribunal condoned the delay in filing those appeals, noting that the orders were not communicated to the assessee and that the assessee's e-filing account was managed by his employer, who was preoccupied with his wife's cancer treatment and subsequently passed away. The assessee remained unaware of the adverse orders until they were accessed from the income-tax portal.

What were the issues?

1. Whether the assessee had reasonable cause for non-compliance with notices issued under section 142(1) of the Income-tax Act, 1961, thereby attracting the protection of section 273B of the Act, leading to the deletion of penalties levied under section 271(1)(b)? Assessee's contentions: The assessee argued that the same circumstances that led to the condonation of delay in filing appeals against the assessment orders also explained the non-compliance with the section 142(1) notices. The assessee claimed to be unaware of the issuance and service of these notices, and that the default was neither deliberate nor contumacious. Therefore, the assessee contended that reasonable cause existed under section 273B, and the penalties should be deleted. Revenue's contentions: The Departmental Representative relied upon the orders of the authorities below, submitting that sufficient opportunities had been afforded to the assessee and no further indulgence was warranted.

Which sections of the Income-tax Act were involved?

Section 271(1)(b),Section 142(1),Section 144,Section 273B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SMT BEENA PILLAI & SHRI JAGADISH

For Appellant: Shri Sakar Sharma, CA (virtually appeared)
For Respondent: Shri Ajay Soneji, CIT-DR
Hearing: 15.09.2026Pronounced: 21.09.2026

Per: SHRI JAGADISH, A.M.:

1.

These five appeals by the assessee are directed against the common order dated 17.11.2025 passed by the learned Commissioner of Income Tax (Appeals)-47, Mumbai [hereinafter referred to as ‘the learned CIT(A)’], confirming the penalties levied by the Assessing Officer under section 271(1)(b) of the Income-tax Act, 1961 (‘the Act’) for non- compliance with notices issued under section 142(1) of the Act. Since the appeals involve the same assessee and a common issue arising from similar facts, they were heard together and are disposed of by this consolidated order. 2. At the outset, the learned Authorised Representative (‘AR’) submitted that the assessments, during the course of which the notices under section 142(1) of the Act were issued, were completed ex parte under section 144 of the Act. The penalties impugned in the present appeals were thereafter levied for the alleged non-compliance with those notices. The learned AR further submitted that the assessee had preferred appeals against the assessment orders. The learned CIT(A), however, dismissed those appeals as time-barred on account of the delay in filing them. The matter thereafter came before the coordinate Bench of the Tribunal. It was explained before the Tribunal that neither the assessment orders nor the penalty orders had been communicated to the assessee on his mobile number or e-mail address. The assessee’s income-tax e-filing account was stated to have been operated and controlled by his employer, Shri Kamlesh Rajnikant Shah, who was preoccupied with the treatment of his wife suffering from cancer and who subsequently passed away. It was accordingly submitted that the assessee remained unaware of the adverse orders until they were later

ITA Nos.6399 to 6402 & 6553/M/2026 Chandrakant Babaldas Patel

accessed from the income-tax portal. Having regard to the explanation and the peculiar facts and circumstances, the coordinate Bench condoned the delay in filing the appeals before the learned CIT(A). 3. The learned AR submitted that the same circumstances also explained the non-compliance with the notices issued under section 142(1) of the Act. According to him, the assessee was unaware of the issuance and service of the notices and the default was neither deliberate nor contumacious. He therefore submitted that the assessee had reasonable cause within the meaning of section 273B of the Act and that the penalties deserved to be deleted. 4. The learned Departmental Representative (‘DR’), on the other hand, relied upon the orders of the authorities below. He submitted that sufficient opportunities had been afforded to the assessee and that no further indulgence was warranted. 5. We have heard the rival submissions and perused the material available on record. Section 273B of the Act provides, inter alia, that no penalty shall be imposable under section 271(1)(b) where the assessee proves that there was reasonable cause for the failure. In the present case, the explanation of the assessee regarding his lack of awareness of the proceedings and the circumstances in which his e-filing account was being handled was also placed before the coordinate Bench in the quantum proceedings. Upon considering that explanation and the peculiar facts, the coordinate Bench condoned the delay in filing the quantum appeals before the learned CIT(A). Although condonation of such delay does not, by itself, result in automatic deletion of the penalties, the underlying circumstances constitute relevant evidence while examining whether the defaults were supported by reasonable cause. Nothing has been brought before us to show that the explanation was found to be false or that the non-compliance was deliberate or 3

ITA Nos.6399 to 6402 & 6553/M/2026 Chandrakant Babaldas Patel

contumacious. We further find that, in the assessee’s own case on identical facts, the coordinate Bench of the Tribunal, vide consolidated order dated 09.09.2026 passed in ITA Nos.6397, 6398, 6554, 6555, 6556, 6557, 6558, 6559 and 6560/Mum/2026 for assessment years 2013-14 to 2019-20, cancelled the penalties levied under section 271(1)(b) of the Act. No distinguishing fact or contrary decision has been brought to our notice. Respectfully following the said decision and, independently, having regard to the reasonable cause established on the facts of the present appeals, we hold that the protection of section 273B of the Act is attracted. Accordingly, the penalties levied under section 271(1)(b) of the Act and sustained by the learned CIT(A) are deleted. The grounds raised by the assessee in all the appeals are allowed. 6. In the result, all five appeals filed by the assessee are allowed.

Order pronounced in the open court on 21/09/2026.

Sd/- Sd/- (BEENA PILLAI) (JAGADISH) Judicial Member Accountant Member

Mumbai, Dated: 21/09/2026 Ashwani Rao Sr. Private Secretary

ITA Nos.6399 to 6402 & 6553/M/2026 Chandrakant Babaldas Patel

Copy of the order forwarded to: 1. Appellant 2. Respondent 3. The CIT 4. The CIT (Appeals) 5. The DR, I.T.A.T. By order

(Assistant Registrar) ITAT, Mumbai

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