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Facts
The assessee received substantial income but failed to file income tax returns for multiple assessment years. Consequently, assessment proceedings were initiated under Section 147, and penalties were levied under Section 271(1)(c) for concealment of income and under Section 270A. The assessee did not comply with notices and raised jurisdictional objections late in the proceedings.
Held
The Tribunal upheld the penalties, agreeing with the lower authorities that jurisdictional objections must be raised at the earliest opportunity. Concealment of income was established due to the failure to disclose substantial income despite opportunities. The penalty under Section 270A was also dismissed based on earlier adjudication.
Key Issues
Whether the penalties levied for concealment of income and under Section 270A are justified, considering the assessee's non-compliance and late jurisdictional objections.
Sections Cited
271(1)(c), 270A, 147, 148, 143(2), 142(1), 139(1), 124(3)
AI-generated summary — verify with the full judgment below
Before: SHRI INTURI RAMA RAO & SHRI SONJOY SARMA
SA Nos. 19 to 22 & 23/Coch/2025 [Assessment Years: 2013–14 to 2016–17 & 2018-19] Koothery Narayanan Vijayan…………..…...………………..…..….……….Appellant Advocate Vishnu Vijayan, Room No.1814, Commercial Complex, Koduvayur Service Cooperative Bank Ltd., Koduvayur PO, Kerala – 678501. [PAN: ABNPV1151H] vs. ITO, Non Corp Ward-2(4) & TPS, Kochi…………………………………...Respondent Appearances by: Shri Vishnu Vijayan, Adv, appeared on behalf of the assessee. Smt. Leena Lal, Snr AR, appeared on behalf of the Revenue. Date of concluding the hearing: June11, 2025 Date of pronouncing the order: August 26, 2025 ORDER Per Sonjoy Sarma, Judicial Member: These first four appeals by the assessee and the connected stay applications arise out of penalty orders passed under section 271(1)(c) of the Income-tax Act, 1961 for assessment years 2013-14 to 2016-17 and to 137 & 138/Coch/2025 & SA Nos. 19 to 22 & 23/Coch/2025 Koothery Narayanan Vijayan along with connected stay applications arise out of penalty orders passed under section 270A of the Income-tax Act, 1961for all relevant assessment years. Since common issues are involved, except for differences in figures and years, these appeals are heard together and are disposed of by this consolidated order. For convenience, for AY 2013-14 is taken as the lead case, and our findings therein shall apply mutatis mutandis to the other appeals.
Brief facts of the Case are that in the case of the assessee for the assessment years in question, the Department received information that the assessee was in receipt of substantial amounts of contract receipts, cash deposits in bank accounts, and interest income. However, no return of income was filed for the respective years. Consequently, assessment proceedings were initiated under section 147 of the Act. Notices under sections 148, 143(2) and 142(1) of the Act were issued. The assessee failed to file any return of income in response to notice under section 148 of the Act and did not comply with notices during reassessment proceedings. Accordingly, the assessments were completed ex parte under sections147/144 of the Act by making additions on account of undisclosed income. Doing so the Assessing Officer also initiated penalty proceedings under section 271(1)(c) for concealment of income and levied penalties. For AY 2013-14, penalty of Rs.1,49,07,713/- was imposed.
Aggrieved by the order of the AO the assessee preferred appeal before the Ld. CIT(A). During the appellate proceedings, the Ld. CIT(A) noted that the assessee, despite having substantial income, failed to file return within the time allowed under section 139(1) or in response to notices under section 148. Since, there was no response to notices issued during reassessment proceedings, resulting in ex parte to 137 & 138/Coch/2025 & SA Nos. 19 to 22 & 23/Coch/2025 Koothery Narayanan Vijayan assessments. Even during penalty appeal proceedings, the assessee remained non-compliant, except for filing an additional ground much later challenging the jurisdiction of the AO. The assessee contended that the penalty was without jurisdiction as per the Act. However, the Ld. CIT(A) rejected the plea, holding that such jurisdictional objections must be raised at the assessment stage and not after the conclusion of assessment and penalty proceedings. While deciding the quantum appeals earlier, the CIT(A)had partly allowed relief to the assessee and directed the AO to pass the order giving effect (OGE). The Ld. CIT(A) in penalty appeals observed that concealment of income was proved beyond doubt and upheld the penalties, with a direction to the AO to recompute the same in line with the OGE.
Dissatisfied with the above order, assessee is in appeal before this tribunal. The learned counsel for the assessee reiterated the jurisdictional objection and challenged the levy of penalty. It was submitted that the additional ground should have been entertained in the interest of justice.
On the other hand, the learned Departmental Representative supported the orders of the lower authorities and submitted that the assessee consistently failed to comply with statutory notices and that the concealment stood established.
We have heard the rival submissions and perused the material on record. The undisputed facts are that the assessee had substantial income for all relevant years but did not file returns of income and notices under section 148 were issued, but the assessee failed to comply. Ultimately, assessments were completed ex parte under sections147/144of the act. In quantum appeals, partial relief was granted, but the assessee did not file appeals against penalty orders to 137 & 138/Coch/2025 & SA Nos. 19 to 22 & 23/Coch/2025 Koothery Narayanan Vijayan within time and raised jurisdictional issues only after considerable delay. While passing the impugned order as held by the Id. CIT(A), section 124(3) mandates that jurisdictional objections must be raised at the earliest opportunity, and failure to do so bars such objections at a later stage. We concur with this view. According the penalty under section 271(1)(c) is justified when there is clear concealment or furnishing of inaccurate particulars. In the present case, concealment is established from the failure to disclose substantial income despite having been given multiple opportunities. Therefore, we find no infirmity in the order of the Ld. CIT(A) in upholding the penalty, subject to re-computation in accordance with the OGE in quantum proceedings. to 137/Coch/2025 are identical to these appeals are also dismissed on similar terms. for the assessment year 2018-19, the penalty was levied under Section 270A of the Income tax Act, which isan amended provision. The facts of the case are similar to earlier penalty proceedings under Section 271(1)(c) of the Act. While dismissing the appeal, the Ld. CIT(A) observed that the quantum of penalty had already been adjudicated and dismissed by order dated 20-05-2024 in respect of the AO's penalty. Consequently, the Ld.CIT(A) upheld the penalty. In view of the concurrent findings of the CIT(A), the present appeal being ITA No. 138/Cochin/25 under Section 270A is also dismissed, in line with the earlier order of the CIT(A).
In view of the above, the all the appeals of the assessee are dismissed.
Since the main appeals are dismissed, the stay applications have become infructuous and are accordingly dismissed. to 137 & 138/Coch/2025 & SA Nos. 19 to 22 & 23/Coch/2025 Koothery Narayanan Vijayan
In the result, all the captioned appeals and corresponding stay applications are dismissed.
26th August, 2025