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Facts
The assessee filed his income tax return which was selected for scrutiny. Notices under section 142(1) were issued. While the assessment was completed accepting the returned income, penalty proceedings were initiated for alleged non-compliance with certain notices.
Held
The Tribunal held that the assessee had sought adjournments due to compilation of information and ultimately furnished the required details, leading to the assessment being completed without additions. Therefore, the penalty for non-compliance was not sustainable.
Key Issues
Whether penalty under section 272A(1)(d) is leviable when the assessee sought adjournment for compilation of information and ultimately complied, leading to an assessment without additions.
Sections Cited
250, 272A(1)(d), 142(1), 143(3)
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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI SANDEEP SINGH KARHAILSHRI JAGADISH
Date of Hearing – 30/03/2026 Date of Order – 06/04/2026
O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the impugned order dated 15.09.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals)-54, Mumbai, [“learned CIT(A)”], which in turn arose from the penalty order passed under section 272A(1)(d) of the Act, for the assessment year 2022- 23.
In this appeal, the assessee has raised the following grounds: - “1. On the facts and the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) erred on facts and in law in not deleting the penalty of Rs. 10,000/- levied vide order u/s 272A(1)(d) of the Income Tax Act, 1961 dated 22.02.2024 passed by the Assessing Officer which is bad-in-law, illegal and void.
2. On the facts and the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) erred on facts and in law in ignoring the fact that there is no whisper about non-compliance as per the Assessment Order dated 11.03.2024, wherein; on the contrary, the Assessing Officer had observed that "Thereafter, in order to complete the assessment proceedings notices w/s 142(1) of the Act were issued from time to time asking the assessee to file relevant details for verification. In response to the statutory notices, the assessee submitted various details from time to time through e-proceedings. The details submittedby the assessee have been duly examined."
3. On the facts and the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) erred on facts and in law in ignoring the fact that the Assessment Order dated 11.03.2024 did not initiate penalty proceedings under section 272A(1)(d) of the Income Tax Act, 1961, thereby making the penalty proceedings illegal, bad-in-law and void-ab-initio.
4. On the facts and the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming the penalty vide order u/s 272A(1)(d) of the Income Tax Act, 1961, despite the fact that the alleged non-compliance of the notice issued u/s 142(1) dated 09.12.2023 is factually incorrect, as the appellant had duly complied with thesaid notice on 15.12.2023 vide e-filing acknowledgement number 555433991151223, which are part of record and thus rendering the impugned penalty order as unjustified, non-est, illegal, bad-in-law and void-ab-initio and therefore requires to be quashed.
5. On the facts and the circumstances of the case and in law, the Assessing Officer erred in levying penalty vide order u/s 272A(1)(d) of the Income Tax Act, 1961, despite the fact that the appellant had sought adjournment and duly complied to the notice dated 09.12.2023 by requesting reasonable time to gather details and furnish the requisite information, thus the notices cannot be treated as uncompiled with and therefore, while ignoring aforesaid compliances on record, the levy of consequent penalty of Rs. 10,000/- by the Assessing Officer and Ld. Commissioner of Income Tax (Appeals) confirming the same, is unjustified, bad in law, and liable to be quashed.
6. On the facts and the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in not affording the appellant a reasonable opportunity of being heard on the question of nature of bonafide reason, before confirming the penalty of Rs. 10,000/-levied u/s 272A(1)(d) of the Income Tax Act, 1961.”
3. The solitary grievance of the assessee is against the penalty of Rs. 20,000/- levied under section 272A(1)(d) of the Act for failure to comply with the notice issued under section 142(1) of the Act.
4. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is an individual, and for the year under consideration, filed his return of income on 07.11.2022, declaring a total income of Rs.37,40,000/-. The return filed by the assessee was selected for scrutiny under CASS, and statutory notices under section 143(2) and section 142(1) of the Act were issued and served on the assessee. After considering various details filed by the assessee from time to time in response to the statutory notices, the Assessing Officer (“AO”) vide order dated 11.03.2024, passed under section 143(3) of the Act, assessed the total income of the assessee at the returned income, without making any addition/disallowance.
5. In the meanwhile, as the assessee failed to comply with certain statutory notices issued under section 142(1) of the Act, the AO initiated penalty proceedings under section 272A(1)(d) of the Act. Vide order dated 22.04.2024 passed under section 272A(1)(d) of the Act, the AO levied a penalty of Rs.10,000/- each for non-compliance of notice dated 31.08.2023 and 09.09.2023 issued under section 142(1) of the Act. The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee. section 142(1) of the Act, the assessee sought an adjournment to compile the details as sought by the AO. As per the learned AR, since the details sought by the AO were not readily available with the assessee, the assessee again sought an adjournment in response to the notice issued on 19.12.2023. The learned AR submitted that in response to the subsequent notices issued by the AO under section 142(1) of the Act, the assessee filed the requisite details, and after consideration of the same, the scrutiny assessment proceedings were concluded vide order passed under section 143(3) of the Act, without making any addition to the return income.
7. On the other hand, the learned Departmental Representative (“learned DR”) vehemently relied upon the orders passed by the lower authorities and submitted that merely seeking an adjournment is not a compliance of the notice issued under section 142(1) of the Act, and therefore, the AO correctly levied penalty under section 272((1)(d) of the Act for each non-compliance.
8. Having considered the submissions of both sides and perused the material available on record, we find that during the scrutiny assessment proceedings, the AO issued various notices under section 142(1) of the Act seeking the details in respect of the return income filed by the assessee. It is evident from the record that in respect of the notices issued on 31.08.2023 and 09.12.2023, the assessee sought an adjournment on the basis that the information sought is under compilation. It is further evident from the record that the information sought by the AO was ultimately furnished by the assessee, which resulted in the assessment orderbeing passed under section 143(3) of the Act, accepting the return of income of the assessee. Thus, it is (A.Y. 2022-23) ostensible that it is not a case where the assessment was concluded on a best judgment basis under section 144 of the Act. Accordingly, we are of the considered view that the penalty under section 272A(1)(d) of the Act cannot be imposed.
In support of our aforesaid conclusion, gainful reference can be made to the following decisions:
1. 1. Shilpa Shetty Kundra vs. DCIT, in order dated 04.04.2025.
2. Bhavna Modi vs. ITO, in order dated 16.08.2024.
3. Shri Hemant Manmohan Panchamiya vs. National E-Assessment Centre, in order dated 29.08.2023. 4. DLF Commercial Enterprises vs. ACIT, (2021) 131 taxmann.com 305 (Delhi-Trib.) 5. Aaryan Motels vs. DCIT, (2017) 88 taxmann.com 7 (Agra – Trib.)
Therefore, in the facts and circumstances of the present case, we do not find any merit in the penalty levied under section 272A(1)(d) of the Act vide order dated 22.02.2024, and the same is quashed.As a result, the grounds of appeal raised by the assessee are allowed.
In the result, the appeal by the assessee is allowed. Order pronounced in the open Court on 06/04/2026