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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per Bench:
The captioned (2) appeals filed by same assessee challenge the penalties imposed by AO and upheld by CIT(A). At the request of parties, both of these appeals were heard simultaneously and are being disposed of by this order.
This appeal is directed against order of first-appeal dated 04.02.2025 passed by learned Commissioner of Income-tax-NFAC, Delhi [“CIT(A)”] which in turn arises out of penalty-order dated 18.07.2024 passed by learned
Page 1 of 6 & 388/Ind/2025 – AY 2016-17 Assessment Unit of Income-tax Department [“AO”] u/s 271(1)(b) of Income- tax Act, 1961 [“the Act”] for assessment-year [“AY”] 2016-17.
The assessee in present case is aggrieved by a penalty of Rs. 30,000/- imposed by AO u/s 271(1)(b) for non-compliances of three (3) notices dated 09.08.2023, 31.08.2023 and 12.09.2023 issued u/s 142(1) during scrutiny-proceedings. Ld. AR for assessee submitted that initially the AO issued notice dated 21.02.2023 u/s 148A(b) to assessee seeking information about sale transaction of immovable property on the basis of information directly received from office of sub-registrar. The notice issued by AO remained unattended by assessee and therefore the AO passed ex- parte order dated 13.03.2023 u/s 148A(d) and proceeded to issue notice u/s 148 to re-open assessee’s case u/s 147. Thereafter, the AO issued notice dated 17.03.2023 u/s 148 followed by aforesaid three (3) notices dated 09.08.2023, 31.08.2023 and 12.09.2023 u/s 142(1) and finding no response from assessee, ultimately framed assessment u/s 144. Further, during first-appeal also, there was non-representation by assessee which led the CIT(A) to pass ex-parte order. Ld. AR submitted that the authorities issued notices to email id: tcairan@gmail.com which was an email id of asessee’s old counsel “Shri TC Airan” registered in database of assessee in departmental record. Further, the authorities also issued physical notices to address of assessee and the assessee forwarded those notices to the office of “Shri T.C. Airan” counsel but “Shri T.C. Airan” expired in October, 2021 and the persons handling his office did not take care, hence non-
Page 2 of 6 & 388/Ind/2025 – AY 2016-17 compliances occurred. Thus, in nutshell, Ld. AR submitted that the non- compliances to the notices issued u/s 142(1) by AO for which the penalty of Rs. 30,000/- has been imposed upon assessee was due to counsel’s death and subsequent careless approach of persons handling consel’s office and not to assessee. Ld. AR submitted that the assessee is a lady; basically an agriculturist and resident of a small village. He submitted that the assessee relied upon the persons handling counsel’s office in a bonafide manner. He submitted that the default is for the reason narrated and therefore there was a “reasonable cause” in terms of section 273B, hence the assessee should not be saddled with the liability of penalty of Rs.
30,000/-. Ld. DR for revenue relied upon the orders of lower-authorities yet left the matter for the wisdom of bench. After a careful consideration and on examination of facts narrated by Ld. AR as well as on perusal of the copies of notices filed by Ld. AR before bench and in absence of any contrary fact or material on record, we find merit in the pleading made by Ld. AR for assessee for non-compliances of the notices. In that view of matter, we agree that there was a reasonable cause for non-compliances of notices in so far as assessee is concerned. We find that the provision of section 273B reads as under:
“273B. Notwithstanding anything contained in the provisions of clause (b) of sub-section (1) of section 271, ……., no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure.”
Page 3 of 6 & 388/Ind/2025 – AY 2016-17 Therefore, having regard to the provision of section 273B, we delete the penalty imposed by AO. The assessee succeeds in this appeal.
ITA No. 388/Ind/2025:
This appeal is directed against order of first-appeal dated 04.02.2025 passed by learned Commissioner of Income-tax-NFAC, Delhi [“CIT(A)”] which in turn arises out of penalty-order dated 28.06.2024 passed by learned Assessment Unit of Income-tax Department [“AO”] u/s 271F of Income-tax Act, 1961 [“the Act”] for assessment-year [“AY”] 2016-17.
The assessee in present appeal is aggrieved by a penalty of Rs. 5,000/- imposed by AO u/s 271F alleging that the assessee had committed a default of non-filing of return of income of AY 2016-17.
Ld. AR for assessee, however, submitted that the assessee is mainly engaged in agricultural activity and the total income of asesese did not exceed the maximum amount not chargeable to tax and therefore the assessee was not required to file return u/s 139(1). Therefore, the assessee did not file any return of AY 2016-17 under consideration. The Ld. AR further submitted that even in immediate preceding AY 2015-16, the assessee filed return to Income-tax department declaring agricultural income of Rs. 2,15,675/- and total income of Rs. 1,15,710/- only and as can be seen the assessee’s total income did not exceed the maximum amount not chargeable to tax and thus the assessee filed return voluntarily without having any compulsion u/s 139(1). Thus, Ld. AR successfully showed that Page 4 of 6 & 388/Ind/2025 – AY 2016-17 the assessee was not having any obligation to file return u/s 139(1) and therefore there is no failure in terms of section 271F and pleaded that the AO is not justified in imposing penalty upon assessee. Ld. DR for revenue relied upon orders of lower-authorities yet left the matter for the wisdom of bench. After a careful consideration and on examination of facts as narrated by Ld. AR, we find a strong merit in the pleading made by Ld. AR for assessee that when the assessee’s total income did not exceed the maximum amount not chargeable to tax, the assessee was not under compulsory obligation to file any return. Accordingly, the penalty u/s 271F is not attracted. Therefore, we delete the penalty imposed by AO. The assessee succeeds in this appeal.
Resultantly, these appeals are allowed.
Order pronounced in open court on 28/11/2025