LATE NIMMATOORI RAJABABU,HYDERABAD vs. ACIT., CENTRAL CIRCLE 2(4), HYDERABAD

On being aggrieved, the assessee preferred appeal before the learned CIT(A) and filed his submissions. The learned CIT(A) after considering the submissions of the assessee, sustained the penalty levied by the Assessing Officer.

CA, P. Murali Mohan Rao, Learned Counsel for the Assessee submitted that, the assessee has explained the reasons for not responding to the summons issued u/sec.131 of the Act dated 31.10.2019. He submitted that, the assessee could not attend on the date of hearing of the case before the Assessing Officer due to his prolonged sickness. However, subsequently, the assessee had furnished details and the Assessing Officer has completed the assessment u/sec.143(3) of the Income Tax Act, 1961. Learned Counsel for the Assessee submitted that, the assessee has furnished the death certificate of the assessee and argued that, after prolonged illness the assessee finally demised on 05.06.2023. He submitted that, the non-appearance of the assessee before the Assessing Officer in response to summons issued u/sec.131 of the Act is out of the above bonafide 5 ITA.No.595/Hyd./2025 reasons and, therefore, the Assessing Officer ought not to have levied the penalty. Further, the learned CIT(A) also without considering the submissions of the assessee, has simply sustained the penalty levied by the Assessing Officer. He, therefore, submitted that, the penalty levied by the Assessing Officer should be deleted.

Sri Posu Babu Alli, Sr. AR for the Revenue, on the other hand, relied on the order of the learned CIT(A). He submitted that, sufficient opportunities were provided to the assessee by the Assessing Officer. However, the assessee did not respond to any of the notices and summons. Therefore, the Assessing Officer has rightly levied the penalty as per the provisions of the Income Tax Act, 1961. He submitted that, even before the learned CIT(A) also during the course of appellate proceedings, the assessee failed to substantiate his case, except reiterating the submissions made before the Assessing Officer.

We have heard both the parties, perused the material on record and the orders of the authorities below. We find that, the assessee has explained the reasons for not responding to the summons issued u/sec.131 of the Income Tax Act, 1961 dated 31.10.2019 by the Assessing Officer and as per the assessee, due to his prolonged sickness, he could not attend on the date when the Assessing Officer issued summons. However, subsequently, the assessee has furnished details and assessment has been completed u/sec.143(3) of the Income Tax Act, 1961. Further, we find that, Learned Counsel for the Assessee has furnished the death certificate of the assessee and argued that, after prolonged illness the assessee finally demised on 05.06.2023. In our considered view, the 7 ITA.No.595/Hyd./2025 reasons given by the assessee for not responding to the summons u/sec.131 of the Act comes under bonafide cause as provided u/sec.273B of the Income Tax Act, 1961 and, therefore, the Assessing Officer ought not to have levied penalty for non-compliance to the summons, even though, he has completed the assessment proceedings u/sec.143(3) of the Income Tax Act, 1961, after considering the relevant submissions of the assessee. The learned CIT(A) without considering the relevant facts, has simply sustained the penalty levied by the Assessing Officer u/sec.272A(1)(c) of the Income Tax Act, 1961. Thus, we set-aside the order of the learned CIT(A) and direct the Assessing Officer to delete the penalty of Rs.10,000/- levied u/sec.272A(1)(c) of the Income Tax Act, 1961.

In the result, appeal of the assessee is allowed.