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Facts
The assessee, IIT Patna, failed to file its income tax return for Assessment Year 2017-18. The Assessing Officer (AO) reopened the assessment and initiated penalty proceedings under section 272A(2)(e) for non-filing of the return, levying a penalty. The CIT(A) upheld the AO's order.
Held
The Tribunal held that the assessee's failure to file the return was due to a bona fide administrative or procedural error and not a wilful default. Considering the precedent from AY 2015-16 where a similar penalty was deleted for reasonable cause, and the absence of tax loss to the revenue, the Tribunal found reasonable cause.
Key Issues
Whether the penalty imposed under section 272A(2)(e) for non-filing of return is sustainable when the assessee has a reasonable cause for the delay.
Sections Cited
272A(2)(e), 139, 147, 144B, 148, 194A, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “PATNA BENCH, PATNA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2017-18 IIT, Patna……………………………………………………………....Appellant Admin Block Bihta, Patna-801106. [PAN: AAAAI2401A] vs. DC/AC, Exemption, Circle-Patna.……………..………………….…..... Respondent Appearances by: Shri Ankit Kumar, CA appeared on behalf of the appellant. Md. A H Chowdhary, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : November 20, 2025 Date of pronouncing the order : November 25, 2025 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal by the assessee is directed against the order dated 19.05.2025 passed by the NFAC, Delhi [the ‘CIT(A)’] under section 250 of the Income-tax Act, 1961.
Brief facts of the Case are that the assessee, IIT Patna, did not file its return of income for the assessment year 2017–18. The Assessing Officer (AO) relied upon information available regarding: Cash deposits: ₹10593857/- Term deposits: ₹62,69,99,990/- Contract receipt: ₹8,51,325/- Interest u/s 194A of the Act : ₹31,59,501/- IIT, Patna purchases of Foreign currency: ₹329,39,39,545/- Foreign remittance: ₹10,40,20,292 On the basis of the above, the AO reopened the assessment under section 147, finalised it under section 144B of the Act by determined the total income. Subsequently, penalty proceedings were initiated under section 272A(2)(e) and show cause notices were issued on 28.11.2024. The AO passed the penalty order, levying a penalty of ₹2,34,400/-.
Aggrieved by the order of the assessing officer the assessee challenged the penalty before the CIT(A), who upheld the AO’s order.
The assessee now in appeals before the Tribunal. The assessee contended the non-filing of the return was due to a bona fide mistake and not wilful default. In response the notice the assessee had participated in the assessment proceedings under section 148 of the Act and during the proceeding no tax liability was due, as the income was either exempt or non-taxable. The Ld. AR stated that in earlier year AY 2015–16, under similar circumstances, the assessee had not filed the return due to similar administrative mistake, and relief was granted by Ld. CIT (A) deleting the penalty. Therefore, the present penalty should also be deleted on the ground of reasonable cause.
On the other hand, the Revenue supported the AO and CIT(A)’s view, arguing that non-filing of return is a violation under section 139, attracting penalty under section 272A(2)(e) of the Act and mere participation in proceedings does not absolve the assessee of liability for penalty.
We have considered the facts and submissions of the parties in the present case the assessee did not deliberately evade filing of return of income and arose due to administrative or procedural error. In the IIT, Patna reassessment preceding U/s 148 of the Act the assessee actively participated and fully cooperating with the AO. Moreover, no tax was payable upon the assessee as determined during assessment proceeding. Hence, there was no loss of revenue. In AY 2015–16, a penalty in similar circumstances was deleted by the Ld. CIT(A), which establishes a precedent for reasonable cause. In view of the above, the penalty levied under section 272A(2)(e) be sustained. Considering the factual matrix, the prior relief granted for similar circumstances, and the absence of any wilful default, we find that the assessee had reasonable cause for non-filing of return. Consequently, the penalty order is set aside.