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Facts
The assessee, an individual, failed to file his income tax return for Assessment Year 2018-19, despite having significant cash deposits in bank accounts. Due to non-compliance with notices under Section 142(1), the Assessing Officer treated the cash deposits as unexplained income and levied a penalty of Rs. 20,000 under Section 272A(1)(d). The CIT(A) upheld the penalty.
Held
The Tribunal acknowledged the assessee's claim of residing in an interior village without internet access as a reason for non-compliance. In the interest of justice, it set aside the CIT(A)'s order and remanded the matter back to the Assessing Officer for a de novo assessment, providing the assessee a fresh opportunity to submit all required documents and be heard.
Key Issues
Whether the penalty imposed under Section 272A(1)(d) for non-compliance with notices was justified, considering the assessee's claim of lack of internet access and issues with notice delivery, and if the assessee should be granted a fresh opportunity for compliance.
Sections Cited
142(1), 69A, 115BBE, 272A(1)(d), 144, 147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms. SUCHITRA KAMBLE
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), /National Faceless Appeal Centre, Delhi, vide order dated 28.05.2025 relevant to the Assessment Year 2018-19. 2. The assessee has raised the following grounds of appeal:
1. Hon. CIT(A), NFAC has erred in holding that Notices are issued to assessee on his registered email address and delivered. In as much as, i. The assessee stays at interior village and he did not have computer and internet facility. Asst. Year : 2018-19 - 2– ii. The registered mail id in Notices u/s 14291) of the Act was of Rx. A.R. and not of assessee. And Ex. A.R. of the assessee did not inform to assessee. iii. The E-mail id given in appeal against Assessment Order and Penalty Order u/s 272A(1)(d) of the Act are of New A.R. and not of assessee. iv. Since SCN u/s 272A(1)(d) of the Act issued by A.O. to assessee on E- mail id dt.23-03-2023, 04-07-2023 and 28-07-2023 were not served then SCN dt.08/08/2023 was sent by Registered Post. The Notices u/s 142(1) were not served by Registered Post.
2. Hon. CIT(A), NFAC has erred in dismissing the appeal and confirming multiple penalties of Rs. 20,000 (Rs. 10,000*2) for default u/s 272A(1)(d) of the Act. In as much as, multiple penalties cannot be levied u/s 271A(1)(d) of the Act. 3. The assessee, an individual, did not file his return of income for the Assessment Year 2018–19. Based on information received, it was found that the assessee had deposited cash of Rs. 19,01,33,662/- in ICICI Bank and Rs. 7,40,39,840/- in Bandhan Bank. During the course of the assessment proceedings, notices under section 142(1) of the Income Tax Act, 1961 were issued to the assessee. However, the assessee neither complied with the notices nor furnished any documents or evidence to explain the source of such large cash deposits. Consequently, the Assessing Officer treated the cash deposits as unexplained and added the same to the total income of the assessee under section 69A read with section 115BBE of the Act. In view of the non-compliance, the Assessing Officer issued show cause notices under section 272A(1)(d) of the Act on five occasions, calling upon the assessee to explain why a penalty should not be imposed. Despite repeated opportunities, the assessee again failed to respond. Accordingly, the Assessing Officer levied a penalty of Rs. 20,000/- under section 272A(1)(d) of the Act vide order dated 30.08.2023. Asst. Year : 2018-19 - 3– 4. Aggrieved against the Penalty Order, the assessee filed an appeal before the Ld. CIT (A), who confirmed the action of the Assessing Officer by observing as follows:
5.1 I have carefully considered the grounds of appeal
, assessment order and material available on record. 5.2 The explanation submitted by the assessee regarding his failure to response notices issued by the AO in the course of the assessment proceedings, is not tenable in the following grounds. 5.3 The assessee has claimed that he resides in interior part of Gujarat and accordingly notices were not received due to lack of internet facility. However, it is to be stated that notices were issued in the to the assessee 's d registered email address and duly delivered. Hence, question of the non- receipt of the notices does not arise. Further it is noteworthy, that order u/s. 144/147 and the penalty order passed u/s. 272A(1)(d) were sent to the assessee in the same email address and the same were duly received by him, which is evidenced of his filing of appeal against both assessment order and penalty order. Thus, it is evident the assessee has deliberately ignored the notices issued to him in course of the assessment and penalty proceedings. Thus, the claim of the assessee that notices were notices not received by him is not acceptable in view of the above facts. 5.4 As evident from the penalty order, that the same action of the assessee has been replicated when notices issued during the penalty proceeding including a notice dated 08.08.2023 which has delivered by registered post, has not been complied with on the part of the assessee. All these factors indicates that there was element of deliberate of acts non- compliances on the part of the assessee. 5.5 On the consideration of the facts on the totality the undersigned is of the view that acts of the non-compliance of notices issued u/s. 142(1) in the course of assessment proceeding is deliberate act on the part of the assessee. The assessing officer has justifiably imposed penalty u/s. 272A(1)(d) amounting to Rs. 20,000/- on the assessee vide penalty order dated 30.08.2023. Accordingly, the appeal filed by the asessee against the said penalty is dismissed.
5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. Asst. Year : 2018-19 - 4–
6. We have carefully considered the rival submissions and perused the material available on record. The Ld. Counsel for the assessee submitted that the assessee resides in an interior village and has no access to internet facilities, which resulted in his non-compliance with the notices issued by the Revenue authorities. It was further submitted that, provided an opportunity, the assessee shall furnish all requisite details, clarifications, and explanations before the authorities. Hence, in the interest of justice, we set aside the order of the Ld. CIT(A) and restore the matter back to the file of the Assessing Officer for de novo assessment, after affording an opportunity of being heard to the assessee. The assessee shall submit all the relevant bank statement/submission/document before the Assessing Officer and comply with the notices issued by the revenue authorities without seeking any unnecessary adjournments.
In the result, the appeal of the assessee is allowed.