FORTUNE SPIRIT LIMITED,BHUBANESWAR vs. DCIT, CENTRAL CIRCLE 1, BHUBANESWAR

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ITA 808/CTK/2026Status: DisposedITAT Cuttack06 October 2026AY 2023-243 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty levied under Section 272A(1)(d) of the Income Tax Act, 1961, should be cancelled. The reasoning was based on the fact that the Assessing Officer had issued a notice dated 4.1.2025, referring to a prior notice dated 12.11.2024, and the assessee had complied with this notice on 17.03.2025. Furthermore, the assessments were completed under Section 143(3) read with Section 147 of the Act. The Tribunal accepted the assessee's submission of reasonable cause under Section 273B of the Act, considering that there was compliance by the assessee during the assessment proceedings and only a minor delay in compliance. The ratio decidendi is that a penalty under Section 272A(1)(d) can be cancelled if reasonable cause is shown under Section 273B for a minor delay in compliance, especially when assessments are completed after due compliance and are not ex-parte. The operative direction was to cancel the penalty and allow the appeals.

What were the facts?

The appeals were filed by Rajesh Kumar Sahu and Fortune Spirit Limited against orders of the CIT(A), Bhubaneswar-2, which confirmed penalties levied under Section 272A(1)(d) of the Income Tax Act, 1961. The assessment years involved are 2020-21 to 2023-24 for Rajesh Kumar Sahu and 2021-22 to 2023-24 for Fortune Spirit Limited. The Assessing Officer had issued a notice under Section 142(1) on 12.11.2024, to which the assessee claimed compliance. A subsequent notice dated 4.1.2025, referring to the earlier notice, was also issued. The assessments were completed under Section 143(3) read with Section 147 on 31.03.2025. The assessee contended that all notices were complied with, except for a minor delay in responding to one notice, and that the assessments were not ex-parte.

What were the issues?

1. Whether the penalty levied under Section 272A(1)(d) of the Income Tax Act, 1961, is sustainable when the assessee has demonstrated reasonable cause for a minor delay in complying with a notice issued under Section 142(1) of the Act, and the assessments were completed after compliance and not ex-parte? Assessee's contentions: The assessee argued that notices issued by the Assessing Officer were duly complied with, with only a minor delay in responding to one specific notice dated 4.1.2025, which was subsequently complied with on 17.03.2025. The assessments were completed under Section 143(3) read with Section 147, indicating that they were not ex-parte and were fairly complied with by the assessee. Therefore, the penalty levied under Section 272A(1)(d) should be cancelled. Revenue's contentions: The Revenue, through the ld Sr. DR, vehemently supported the orders of the Assessing Officer and the CIT(A), implying that the penalty was justified.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: S/SHRI GEORGE MATHAN & G. GURUSAMY

For Appellant: Shri Chitrasen Parida, Adv
For Respondent: Shri Vijaya Singh ld Sr DR
Hearing: 06/10/2026Pronounced: 06/10/2026

1 ITA Nos.793 to 796 /CTC/2026 Assessment Years: 2020-21 to 2023-24 ITA Nos.806 to 808 /CTC/2026 Assessment Years: 2021-22 to 2023-24

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL MEMBER AND G. GURUSAMY, ACCOUNTANT MEMBER ITA Nos.793 to 796 /CTC/2026 Assessment Years: 2020-21 to 2023-24 Rajesh Kumar Sahu, Vs. DCIT, Aayakar Bhavan, Annex, Plot No.31, Unit-III, Kharvel Central Circle-1, Bhubaneswar. Nagar, Bhubaneswar. PAN/GIR No.AFMPS 1931 B (Appellant) .. ( Respondent) ITA Nos.806 to 808 /CTC/2026 Assessment Years: 2021-22 to 2023-24 Fortune Spirit Limited, Vs. DCIT, Aayakar Bhavan, Annex, Plot No.31, Unit-III, Kharvel Central Circle-1, Bhubaneswar. Nagar, Bhubaneswar PAN/GIR No.AABCF 1693 C (Appellant) .. ( Respondent) Assessee by : Shri Chitrasen Parida, Adv Revenue by : Shri Vijaya Singh ld Sr DR Date of Hearing : 06/10/2026 Date of Pronouncement : 06/10/2026

O R D E R Per Bench ITA Nos.793 to 796/CTC/2026 for the assessment years 2020-21 to 2023-24 are the appeals filed by Rajesh Kumar Sahu (assessee) against the separate orders of the ld CIT(A), Bhubaneswqar-2 dated 9.7.2026 in Appeal No. CIT(A), Bhubaneswar- 2/10575/2019-20, in Appeal No. CIT(A), Bhubaneswar-2/10175/2020-21, in Appeal

2 ITA Nos.793 to 796 /CTC/2026 Assessment Years: 2020-21 to 2023-24 ITA Nos.806 to 808 /CTC/2026 Assessment Years: 2021-22 to 2023-24

No. CIT(A), Bhubaneswar-2/10121/2021-22, and in Appeal No. CIT(A), Bhubaneswar- 2/10003/2022-23, confirming the penalty levied u/s.272A(1)(d) of the Act. 2. ITA Nos.806 to 808/CTC/2026 for the assessment years 2021-22 to 2023-24 are the appeals filed by Fortune Spirit Limited (assessee) against the separate orders of the ld CIT(A), Bhubaneswar-2 dated 9.7.2026 in Appeal No. CIT(A), Bhubaneswar- 2/10172/2020-21, in Appeal No. CIT(A), Bhubaneswar-2/10120/2021-22, and in Appeal No. CIT(A), Bhubaneswar-2/10100/2022-23, confirming the penalty levied u/s.272A(1)(d) of the Act.

3.

Shri Chitrasen Parida, ld AR appeared for the assessee and Shri Vijaya Singh, ld Sr. DR appeared for the revenue. 4. It was submitted by ld AR that the Assessing officer had issued notice u/s/.142(1) on 12.11.2024, which had duly been complied to by the assessee. It was the submission that except to notice dated 4.1.2025 referring to the said notice dated 12.11.2024, all the notices had been complied. It was the submission that the assessments have been compLETED u/s.143(3) r.w.s. 147 on 31.3.2025. It was the submission that these are not exparte and fairly complied by the assessee and only one notice was not complied. It was the submission that penalty levied u/s.272A(1)(d) may be cancelled insofar as there in compliance to the notices issued by the AO on 17.3.2025. 5. In reply, ld Sr DR vehemently supported the order of the AO and ld CIT(A).

3 ITA Nos.793 to 796 /CTC/2026 Assessment Years: 2020-21 to 2023-24 ITA Nos.806 to 808 /CTC/2026 Assessment Years: 2021-22 to 2023-24

6.

We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the Assessing Officer has issued second notice dated 4.1.2025 referring to notice dated 12.11.2024 and the assessee has complied to the said notice on 17.3.2025 and also the assessments have been completed u/s.143(3) r.w.s. 147 of the Act. As there is compliance by the assessee in the course of assessment and there is only minor delay in compliance, we accept the reasonable cause submitted by the assessee u/s.273B of the Act and cancel the penalty u/s. 272A(1)(d) of the Act as levied by the AO and confirmed by the ld CIT(A). 7. In the result, appeals of the assessees stand allowed. Order dictated and pronounced in the open court on 06/10/2026. Sd/- Sd/- (G. GURUSAMY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack ; Dated 06/10/2026 RS Copy of the Order forwarded to : 1. The Appellant: Rajesh Kumar Sahu/Fortune Spirit Limited, Plot No.31, Unit-III, Kharvel Nagar, Bhubaneswar

2.

The respondentDCIT, Aayakar Bhavan, Annex, Central Circle-1, Bhubaneswar. 3. The CIT(A)-Bhubaneswar-2 4. Pr.CIT, 5. DR, ITAT, 6. Guard file. By order //True Copy// Asst. Registrar. ITAT, Cuttack

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