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Income Tax Appellate Tribunal, “SMC”
Before: DR. ARJUN LAL SAINI
Pooja Dipen Shah Income Tax Officer बनाम/ Pooja, 54 – Digvijay Plot, Ward – 2(6), 3rd Street, Vs Jamnagar - 361005. Jamnagar - 361005 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AQGPC4432L (अपीलाथ�/Appellant) (��यथ�/Respondent) �नधा�रती क� ओर से/Assessee by : Shri Darshit Ranpara, Ld. AR राज�व क� ओर से/Revenue by : Shri Dheeraj Kumr Gupta, Ld. Sr-DR सुनवाई क� तार�ख /Date of Hearing : 09/09/2025 घोषणा क� तार�ख /Date of Pronouncement : 27/11/2025 आदेश/Order Per, Dr. Arjun Lal Saini, A.M:
The present appeal has been filed by the Assessee, against the order passed by the Learned Commissioner of Income Tax (Appeal), Ahmedabad/ National Faceless Appeal, Centre (NFAC), Delhi dated [hereinafter referred to as “CIT(A)”] dated 23.06.2025, arising in the matter of assessment order passed u/s. 272A(1)(d) of the Income Tax Act, 1961 (here-in-after referred to as “the Act”) relevant to the Assessment Year 2017-18.
Grounds of appeal raised by the assessee are as follows:
The grounds of appeal
mentioned hereunder are without prejudice to one another.
2. Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as the "CIT(A)"] erred on facts as also in law in confirming penalty of Rs. 10,000/- levied u/s. 272A(1)(d) of the Act. The penalty levied u/s. 272A(1)(d) of the Act is totally unjustified on facts as also in law may kindly be deleted.
3. Your Honour's appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.”
3. Succinctly, the factual panorama of the case is that assessee before us is an Individual and had filed its return of income for the assessment year (A.Y.) 2017-18, on 25.12.2017, declaring total income of Rs. 1,91,110/-. As per information available to the I.T. department the assessee had deposited cash amounting to Rs. 23,40,000/-, in her bank account maintained with the Navanagar Co-operative Bank Ltd, during demonetization period. The notice u/s 148 of the Act, was issued on 16.04.2021 and consequent to the order of Hon'ble Supreme Court in the case of UOI & others Vs Ashish Agrawal dated 04.05.2022 order u/s 148A was issued on 26.07. 2022 and notice u/s 148 was issued again on 30.07.2022. Accordingly, the assessment was completed u/s 147 of the Income Tax Act, on 17 03.2023 by assessing total income at Rs 5,79 110/- The addition of Rs 3,88,000/- on cash deposits as unexplained money u/s 69A of the Income Tax Act, 1961 was made. In this case penalty proceeding u/s. 272A(1)(d) of the Act, was also initiated on 30.01.2023 for non compliance to notice u/s 142(1) of the Act vide ITBA/AST/F/142(1)/2022-23/1048328865(1) dated 29/12/2022 issued during the penalty proceeding and the assessing officer, after hearing the assessee, levied penalty of Rs.10,000/-, under section 272A(1)(d) of the Act
4. Aggrieved by the order of the assessing officer, the assessee carried the mater in appeal before the Ld. CIT(A) who has dismissed the appeal of the assessee. The Ld. CIT(A) observed that the assessee did not respond the notices u/s.142(1) of the Act dated 29.12.2022, therefore, the assessing officer has rightly imposed the penalty u/s.272A(1)(d) of the Act.
5. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before this Tribunal.
6. Learned Counsel for the assessee, submitted that the assessment was framed u/s.143 r.w.s. 147 of the Act. The assessment was not framed u/s.144 of the Act. The Ld. Counsel for the assessee submitted that during the penalty proceedings, the assessee submitted the written submissions and stated that assessee has made the compliance for subsequent notices, except the one notice, therefore, penalty should not be imposed. The Ld. Counsel also submitted that during the assessment proceedings the assessee has submitted online submissions from time-to-time. Therefore, there was full compliance, on the part of the assessee. Further, the assessment order was framed u/s. 143(3) r.w.s. 147 of the Act and the assessment order was not framed ex parte, hence, there is a sufficient compliance on the part of the assessee, therefore, penalty should not be imposed on the assessee.
7. On the other hand, Ld. DR for the Revenue submitted that there was a non-compliance of the notice u/s.142(1) of the Act dated 29.12.2022. Therefore, the assessing officer has rightly imposed the penalty of Rs.10,000/- on account of non-compliance of notice u/s.142(1) of the Act dated 29.12.2022, which may be confirmed by this Tribunal, as there is non-compliance on the part of the assessee.
8. I have heard both the parties and perused the materials available on record. I note that in the course of assessment proceedings, the assessee in response to notice u/s 142(1) dated 29.12.2022 and subsequent notices had furnished elaborative replies along with necessary supporting evidences online on 04.02.2023 & 22.02.2023. The assessing officer also in the assessment order accepted that the appellant has furnished details as called and finalized the assessment u/s.147 of the Act read with section 143(3 ) of the Act and not u/s.144 of the Act. This attitude of the appellant shows that assessee has high regards to the statute and there was no intention of the appellant for alleged non- compliance. It may be seen from the assessment order that the appellant has cooperated in the process and there is no intention to avoid compliance. The assessing officer levied penalty under routine manner disregarding the fact that while levying penalty, statute requires the assessing officer to exercise discretion judiciously. Reliance is placed on the decision of Hon'ble Supreme Court in the case of Hindustan Steel Limited vs. State of Orissa (83 ITR 26), wherein it has been held that:
An order of imposing penalty for failure to carry out statutory obligation is the result of quasi criminal proceedings and penalty will not ordinarily be imposed unless party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of authority to be exercised judicial and on a consideration of relevant circumstances. Even if a minimum penalty is prescribed the authority competent to impose penalty will be justified in refusing to impose penalty when there technical or venial breach of the provisions of the Act of where breach flows from bonafide belief that the offense is not liable to act in the manner prescribed by the statute
9. On similar and identical facts, I also rely on the judgment of the Co- ordinate Bench of ITAT, Ahmedabad in the case of M/s. Raj Enterprise vs. ITO in for A.Y. 2007-08, order dated 04.03.2015, wherein it was held as follows:
“8. We find that in the similar circumstances, the Chennai Bench of the Tribunal, wherein one of us (N.S. Saini, Accountant Member) was a Member constituting the Bench, deleted penalty by order passed in the case of Sardarmal Kothari Vs. ACIT, in dated 8.3.2013, and has held as under: “This is an appeal filed by the assessee against the order of Commissioner of Income Tax (Appeals)-IX, Chennai, dated 30.8.2012 for the Asst. Year 2009- 10. The only grievance of the assessee in this appeal is that the Commissioner of Income Tax (Appeals) erred in confirming the penalty of Rs.10,000/- levied by the Assessing Officer under sec.271(1)(b) of the I.T. Act.
2. The Assessing Officer levied penalty of Rs.10,000/- under sec.271(1)(b) of the Act as the assessee did not respond to notices issued by him under sec.143(2) & 142(1) of the I.T. Act on three occasions, ie., on 2.9.2010, 8.9.2011 and 15.10.2011, fixing the dates of hearing on 20.9.2010, 12.9.2011 and 20.10.2011 respectively. Subsequently, the assessment was made under sec.143(3) of the Act wherein the assessee appeared and furnished information called for by the Assessing Officer. The assessee preferred appeal before the Commissioner of Income Tax (Appeals) against levy of penalty contending that no Show Cause Notice has been issued by the Assessing Officer before levy of penalty under sec.271(1)(b) of the Act.
The assessee contended that he has cooperated with the Assessing Officer by responding to the notices issued there after and the assessment was completed under sec.143(3) of the Act and, therefore, since he has cooperated with the assessment proceedings complying with the notices subsequently issued and since the assessment was made under sec.143(3) of the Act and it was not an ex-parte assessment under sec.144 of the Act, the Assessing Officer should not have levied penalty under sec.271(1)(b) of the Act. He placed reliance on the decision of Delhi Bench of the ITAT in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust v. Asst. Director of Income Tax (115 TTJ 419) and the decision of Ahmedabad Bench of the Tribunal in the case of Swarnaben M. Khanna & Others v. DCIT (132 TTJ 1). However, the Commissioner of Income Tax (Appeals) confirmed the penalty levied by the Assessing Officer on the ground that the assessee did not respond to the notices issued by the Assessing Officer.
The Counsel for the Assessee reiterates the submissions made before the Commissioner of Income Tax (Appeals) and submits that there is no justification in levying penalty, especially when the assessment was made under sec.143(3) of the Act and not under sec.144 of the I.T. Act.
Departmental Representative supported the orders of lower authorities.
We have heard both sides. Perused the materials on record and the orders of authorities below. We have gone through the decisions relied on by Page | 5 the Counsel for the Assessee. In both these decisions, the Tribunal held that when an assessment has been made under sec.143(3) and not under sec.144 of the I.T. Act, it means that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the Assessing Officer and, therefore, there is no case for levy of penalty under sec.271(1)(b) of the Act. In the present case, the assessee seems to have cooperated with the assessment proceedings by responding to the notices and filing information called for and the assessment was completed under sec.143(3) and not sec.144 of the Act. Therefore, we hold that there is no case for levy of penalty under sec.271(1)(b) of the I.T. Act the assessee’s case.”
Respectfully following the above order of the Tribunal, we delete the penalty of Rs.50,000/- levied under section 271(1)(b) of the Act, and allow the appeal of the assessee.
Considering these facts and circumstances, I delete the penalty of Rs.10000/- and allow the appeal of the assessee.
In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 27/11/2025.