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Facts
The assessee was penalized under section 272A(1)(d) of the Income Tax Act, 1961, for belatedly filing an adjournment application in response to a notice under section 142(1). The assessee's appeal was dismissed by the CIT(A) due to non-compliance with notices. The assessee contended that their response was not properly considered by the AO and CIT(A).
Held
The Tribunal noted that the assessee had attempted to comply and sought an adjournment, but this response was not taken into consideration. Given the nature of the penalty for non-compliance and the assessee's claim of having material to demonstrate compliance attempts, the matter was restored to the CIT(A) for fresh adjudication.
Key Issues
Whether the penalty imposed under section 272A(1)(d) for belated compliance with a notice under section 142(1) is justified, and whether the appellate authority properly appreciated the assessee's explanation for non-compliance.
Sections Cited
272A(1)(d), 274, 142(1), 147, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: HON’BLE JUSTICE (RETD.) C.V. BHADANG & SHRI ARUN KHODPIA, AM
O R D E R
Per Arun Khodpia, AM:
The captioned appeal is preferred by assessee to assail the order of Commissioner of Income Tax (Appeals) / NFAC (for short “The Ld. CIT(A)”), dated 25.09.2025, for the Assessment Year (AY) 2018-19, arises from the penalty order passed u/s 272A(1) r.w.s. 274 of Income Tax Act, 1961 (for short “The Act”), dated 03/08/2023, by Assessment Unit, Income Tax Department, (for short “the Ld. AO”).
The grounds of appeal raised by the assessee are as under: “The Commissioner of Income-tax (Appeals) at the National Faceless Appeal Centre, Delhi (hereinafter referred to as the CIT(A)) erred in upholding the action of the Officer at the Assessment Unit, Income-tax Department (hereinafter referred to as the Assessing Officer) in levying penalty of Rs 10,000 under section 272A(1)(d) of the Act on the fact that the appellant failed to comply with the notice under section 142(1) inasmuch as the appellant filed adjournment application belatedly. The appellant contends that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have confirmed the levy of the impugned penalty by the Assessing Officer under section 272A(1)(d) of the Act inasmuch as the reasons assigned by the CIT(A) are not tenable in law.”
3. Briefly stated, the assessee filed his return of income showing total income at Rs. 8,85,460/-. Subsequently, the case of assessee was selected for scrutiny under section 147 of the Act, in pursuance to a search and seizure operation in the case of Middleman / Businessmen Group including Promoter Shri Girish Pawar and related entities (G.N.P), conducted by Investigation Wing, Mumbai. During the said search operation various incriminating material were seized amongst which a number of buyers as per “On-money Sheet” were found with unaccounted transactions not offered to tax. The present assessee is also one of the various entities/buyers, who had paid Rs. 1,03,70,000/- to G.N.P. Group for purchases of immovable property. Assessment under section 147 r.w.s. 144B was completed on 03.03.2023 with no variation in the income offered by the assessee in his return of income. However, a penalty under section 272A(1)(d) was initiated in non-compliance of notice under section 142(1) dated 13.09.2022. Subsequently an order under Nitin Ramchandra Kalambe section 272A(1)(d) passed on 03.08.2023 imposing a penalty of Rs. 10,000/- as initiated in the assessment order.
4. Assessee preferred an appeal to challenge the aforesaid penalty imposed, however before the ld. CIT(A), the assessee remained non-compliant towards all the five notices issued, therefore the appeal of assessee has been dismissed in absence of any reasonable cause for non-compliance before the ld. AO.
5. Before us the ld. AR representing the assessee submitted that the assessee has made certain response to the notice u/s 142(1), however it was not taken into cognizance by the AO and also not appreciated correctly by the First Appellate Authority (FAA), whereas the assessee has reasonable explanations to show that the compliance was made before the ld. AO and would be able to demonstrate the same with corroborative evidences. Therefore, the decision of ld. CIT(A) without appreciating the facts of the case property is liable to be set- aside and the penalty imposed by ld. AO may be deleted.
Ld. SR. DR on the other hand vehemently supported the orders of revenue authorities.
We have considered the rival submissions perused the material available on record and the decisions of authorities below. In the present case, ld. AR had explained that a response was furnished before the ld. AO towards the impugned notice u/s 142(1), that the assessee had sought adjournment on 3 Nitin Ramchandra Kalambe 27.09.2022 in response to the said notice, however the same was not taken into consideration, which could not be properly demonstrated before the ld. CIT(A). Be that as it may, since the issue is regarding levy of penalty for non- compliance by the assessee, whereas the assessee has certain material with him, to show that the assessee has attempted for the compliance, the issue needs proper verification and adjudication accordingly. Under such circumstances, it would be appropriate to restore this matter back to the file of ld. CIT(A), which is expressed in the hearing itself and fairly agreed by both the parties. Accordingly, the matter is restored back to the file of ld. CIT(A) for fresh adjudication after affording a reasonable opportunity of being heard to the assessee.
In result, the appeal of assessee is allowed for statistical purposes, in terms of our aforesaid observations.
Order pronounced in the open court on 23-01-2026.