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Facts
The assessee filed two appeals against penalty orders for Assessment Year 2017-18. The assessment order was initially framed under Section 144 and penalty proceedings under Section 271F were initiated. The core of the dispute lies in the fact that the notice under Section 142(1) for the assessment proceedings was issued beyond the prescribed date.
Held
The Tribunal held that the assessment proceedings were quashed due to the issuance of the notice under Section 142(1) beyond the prescribed date, making the proceedings void ab initio. Consequently, the penalty initiated and imposed would not survive.
Key Issues
Whether the penalty imposed under Section 271F and Section 272A(1)(d) can survive when the assessment proceedings themselves have been quashed due to a jurisdictional defect (late issuance of notice u/s 142(1)).
Sections Cited
144, 271F, 272A(1)(d), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI NIKHIL CHOUDHARY
PER KUL BHARAT, VICE PRESIDENT.:
These two appeals by the assessee one against the order u/s 271F of the Income Tax Act, 1961 (“Act”, for short) dated 22.10.2024 and another against the order u/s 272A(1)(d) of the Act dated 21.10.2024, pertaining to the assessment year 2017- 18.
For the sake of convenience, both appeals were heard together and are being disposed of by way of consolidated order. First, we take up the A.Y. 2017-18. The assessee has raised the following grounds of appeal: - “1. That the Learned Commissioner of Income Tax (A), NFAC, Delhi has been wrong in law and on facts in confirming the penalty of Rs.5000/- imposed U/s 271F of the Income Tax Act, 1961 vide DIN & order No. ITBA/NFAC/S/250/2024-25/1069846257(1) dated 22.10.2024.
2. That the penalty of Rs.5000/- imposed u/s 271F of the Income Tax Act,1961 by the Assessing Officer and confirmed by the Learned & 682/LKW/2024 Page 2 of 5 Commissioner of Income Tax(A), NFAC Delhi is without considering the real facts of case and is unjustified and arbitrary.
3. That the penalty of Rs.5000/- imposed U/s 271F of the Income Tax Act, 1961 by the Assessing Officer and confirmed by the Learned Commissioner of Income Tax (A), NFAC Delhi is bad in law, on facts and against the principles of natural justice.
4. That the appellant craves leave to amend any one or more of the grounds of appeal as stated above as and when need of doing so arise during the course of appellate proceedings.”
3. The facts giving rise to the present appeal are that, in this case, the assessment was framed u/s 144 of the Act vide order dated 25.11.2019. The Assessing Officer, while framing the assessment also initiated penalty proceedings u/s 271AAC(1) of the Act as well as 271F of the Act. Thereafter, in respect of the penalty proceedings u/s 271F of the Act, the Assessing Officer imposed penalty vide order dated 02.08.2021 of Rs.5000/- against the assessee. Aggrieved by this, the assessee preferred an appeal before the Ld. CIT(A) who sustained the penalty. Aggrieved against this order, the assessee is in appeal before this Tribunal.
Apropos to the grounds of appeal, Ld. Counsel for the assessee contended that in this case the quantum has been deleted and the impugned assessment order has been quashed.
5. On the other hand, the Ld. Departmental Representative for the Revenue supported the penalty order.
We have heard the rival contention and perused the material available on records. We find that in the assessee’s own case for A.Y. 2017-18, the Tribunal vide its order dated 19.09.2025 rendered in in respect of the quantum proceedings has quashed the assessment proceedings, inter alia, by observing as under: -
“5.0 I have heard the rival submissions and have also perused the material on record. The Ld. A.R. has drawn attention to letter F & 682/LKW/2024 Page 3 of 5 No.225/363/2017-ITA.II dated 15.11.2017 and it will be relevant, at this juncture, to reproduce the contents of the above said letter:
5.1 A perusal of the last paragraph, i.e., paragraph 4 in the above said letter, specifically lays down that the process of service of notice under section 142(1) of the Act should be completed by 31.12.2017. A perusal of the assessment order itself shows that the notice under section 142(1) of the Act in the case of the present assessee was issued on 09.03.2018 and, therefore, undisputedly, the statutory notice under section 142(1) of the Act has been issued beyond the date prescribed and, as such, the Instruction of the Department being binding on the Revenue Authorities, the issuance of notice beyond the prescribed date makes the proceedings itself void ab initio. Accordingly, I am of the considered view that in the present case the assessment proceedings deserve to be quashed. Accordingly, the assessment proceedings are hereby quashed, as notice under section 142(1) of the Act was issued beyond the prescribed limit.”
Since the assessment has been quashed on account of lack of jurisdiction, the penalty initiated and imposed would not survive. We hold, accordingly. The grounds raised by the assessee are allowed. Consequently, the appeal of the assessee stands allowed.
Now, coming to the assesse’s appeal in pertaining to the A.Y. 2017-18. The assessee has raised the following grounds of appeal: - & 682/LKW/2024 Page 4 of 5
1. That the Learned Commissioner of Income Tax (A), NFAC Delhi has been wrong in law and on facts in confirming the penalty of Rs.10000/- imposed u/s 272A(1)(d) of the Income Tax Act, 1961 vide DIN & order No. ITBA/NFAC/S/250/2024-25/1069813759(1) dated 21.10.2024.
2. That the penalty of Rs.10000/- imposed u/s 272A(1)(d) of the Income Tax Act,1961 by the Assessing Officer and confirmed by the Learned Commissioner of Income Tax(A), NFAC-Delhi is without considering the real facts of case and is unjustified and arbitrary.
3. That the penalty of Rs.10000/- imposed u/s 272(1)(d) of the Income Tax Act, 1961 by the Assessing Officer and confirmed by the Learned Commissioner of Income Tax (A), NFAC-Delhi is bad in law, on facts and against the principles of natural justice.
4. That the appellant craves leave to amend any one or more of the grounds of appeal
as Stated above as and when need of doling so arise during the course appellate Proceedings.”
9. The facts in the present appeal are identical in the aforesaid appeal. Both the Ld. Counsel for the assessee and Ld. DR have adopted the same arguments as in in this appeal also. Therefore, our findings recorded in paragraph no. 6 rendered in shall apply mutatis mutandis to ITA. No. 682/LKW/2024. For the same reasons, the grounds raised by the assessee are allowed.
Order pronounced in the open Court on 17/10/2025.