DEVAYATBHAI KALOTARA,RAJKOT vs. THE INCOME TAX OFFICER, WARD-2, RAJKOT

ITA 679/RJT/2026Status: DisposedITAT Rajkot09 October 2026AY 2020-213 pages
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What were the facts?

The assessee, Devayatbhai Kalotara, filed his return of income for Assessment Year 2020-21. Reassessment proceedings were initiated under Section 148. It was discovered that the assessee operated Brahmani Dairy, selling Amul milk, with a gross turnover of Rs. 4,09,05,770/-. This turnover exceeded the limit requiring an audit under Section 44AB. The assessee failed to comply with Section 44AB. Consequently, the Assessing Officer (AO) initiated penalty proceedings under Section 271B and levied a penalty of Rs. 1,50,000/-. The assessee appealed to the CIT(A) with a delay of 135 days, citing miscommunication with his Authorized Representative as the reason. The CIT(A) dismissed the appeal without adjudicating on merits due to the delay.

What did the Tribunal hold?

The Tribunal held that the delay of 135 days in filing the appeal before the CIT(A) deserved to be condoned in the interest of substantial justice. The Tribunal reasoned that the assessee should not be denied an opportunity to have the appeal adjudicated on merits solely due to a communication gap between the assessee and their Authorized Representative. Consequently, the delay was condoned. Since the CIT(A) had dismissed the appeal without adjudicating the grounds on merits, the Tribunal set aside the impugned order and restored the matter to the file of the CIT(A) for adjudication on merits, after providing the assessee a reasonable opportunity of being heard. The Tribunal also imposed a cost of Rs. 500/- on the assessee, to be deposited with the Prime Minister's National Relief Fund, with proof of deposit to be furnished to the CIT(A). The issue of penalty sustainability on merits was not decided by the Tribunal.

What were the issues?

1. Whether the delay of 135 days in filing the appeal before the CIT(A) should be condoned, turning on the interpretation of 'sufficient cause' under the Income-tax Act, 1961. 2. Whether the penalty levied under Section 271B of the Act is sustainable on merits. Assessee's Contentions: The assessee argued that the delay of 135 days in filing the appeal before the CIT(A) was due to miscommunication between the assessee and his Authorized Representative, and the assessee was not informed about the penalty order in a timely manner. The assessee sought condonation of the delay in the interest of substantial justice. Revenue's Contentions: The judgment records no specific contentions from the revenue regarding the delay or the merits of the penalty.

Which sections of the Income-tax Act were involved?

Section 250,Section 148,Section 44AB,Section 271B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. Arjun Lal Saini & Shri Sonjoy Sarma

For Appellant: Shri Samir Bhuptani, Ld. AR
For Respondent: Shri Ganesh Iyer, Ld. Sr. DR
Hearing: 08/10/2026Pronounced: 09/10/2026

Per, Shri Sonjoy Sarma, JM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2020-21, is directed against the order under section 250 of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] passed by the National Faceless Appeal Centre [hereinafter referred to as ‘NFAC’], dated 02.03.2026, which in turn arises out of penalty levied u/s. 271B of the Act, dated 19.08.2025. 02. Brief facts of the case are that the assessee filed his return

The order continues below.

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