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Facts
The assessee company, SPR Publications Private Limited, failed to file its return of income for AY 2018-19 despite receiving several notices and orders under various sections of the Income Tax Act. Consequently, the Assessing Officer (AO) passed an assessment order under section 147 r.w.s 144B and also imposed a penalty under section 272A(1)(d) for non-compliance with statutory notices. The assessee appealed against these orders.
Held
The CIT(A) quashed the assessment order for want of valid assumption of jurisdiction but upheld the penalty. The Tribunal, upon reviewing the facts and legal arguments, noted that the penalty's genesis was in the assessment order. As the assessment order was quashed, the penalty could not survive independently.
Key Issues
Whether a penalty imposed under Section 272A(1)(d) can be sustained when the assessment order, from which the penalty originates, has been quashed for want of valid jurisdiction.
Sections Cited
272A(1)(d), 147, 148, 144B, 142(1), 273B, 151, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
करदाताका��त�न�ध�व/ : Shri P. Murali Mohan Rao, CA Assessee Represented by राज�वका��त�न�ध�व/ : Shri Sankar Pandi P, Sr.AR Department Represented by सुनवाईसमा�तहोनेक��त�थ/ : 12/01/2026 Date of Conclusion of Hearing घोषणा क� तार�ख/ : 21/01/2026 Date of Pronouncement ORDER
PER RAVISH SOOD, JM:
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 26/11/2025, which in turn arises from the order passed by the Assessing Officer (for short, “AO”) under section 272A(1)(d) of the Income Tax Act, 1961 (for short, “the Act”),
SPR Publications Private Limited vs. ITO dated 18/09/2024 for the Assessment Year (AY) 2018-19. The assessee has assailed the impugned order of the CIT(A) on the following grounds of appeal:
“1. The order passed by the Ld. CIT (A) under section 250 dated 26- 11-2025 is erroneous both on facts and in law to the extent the order is prejudice to the interests of the appellant.
The Ld. CIT(A) erred in upholding the addition of Rs. 30,000/- u/s 272A(1)(d) without considering the facts of the case, 3. The Ld. CIT(A) ought to have appreciated that penalty cannot be imposed if the assessee has a reasonable cause for the non- compliance of notices as stipulated in section 273B of the Act.
4. The Ld. CIT(A) ought to have appreciated that the assessee could not respond to the notice as the circumstances were beyond its control and there is no intention of not attending or non-submission of any information and there is no willful attempt not to respond to the notices.
5. The Ld. CIT(A) erred in law and on facts in upholding the levy of penalty u/s 272A(1)(d) of the Act, despite the fact that the quantum assessment itself was completed u/s 147 r.w.s 143(3) r.w.s 144B of the Act, no penalty u/s 272A(1)(d), was legally leviable, and therefore, the impugned order is invalid, unsustainable, and bad in law.
6. Without prejudice to the above, the Ld. CIT(A) erred in confirming the penalty u/s 272A(1)(d) of Rs. 30,000/-, without considering the fact that the quantum assessment itself was quashed by the CIT(A) and upholding such levy is unsustainable and injudicious to the appellant.
The appellant may, add or alter or amend or modify or substitute or delete and/or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal.”
2. Succinctly stated, the AO based on information observed that the assessee company during the subject year had though carried out substantial financial transactions, viz., (i) cash deposits in bank accounts: Rs.2,09,40,900/-; (ii) received contractual payments: Rs.4,70,86,517/-; and (iii) received interest (other than interest on SPR Publications Private Limited vs. ITO securities): Rs.11,29,690/-, but had not filed its return of income for the subject year, initiated proceedings under section 147 of the Act. Thereafter, the order under section 148A(d) of the Act, dated 28/04/2022, was passed by the ACIT, Circle-3(1), Hyderabad, i.e., JAO. Also, notice under section 148 of the Act, dated 28/04/2022, was issued by the ACIT, Circle-3(1), Hyderabad. However, the assessee company failed to comply with the notice issued under section 148 of the Act, dated 28/04/2022, and did not file its return of income in compliance to the same.
3. Ostensibly, a perusal of the assessment record reveals that though the AO had issued notices under section 142(1) of the Act on three occasions, i.e., dated 26/07/2023 (seeking compliance by 10/08/2023), dated 18/10/2023 (seeking compliance by 27/10/2023), and dated 01/11/2023 (seeking compliance by 07/11/2023), but the assessee company failed to respond to either of the said notices. Thereafter, the AO, considering the non-cooperation of the assessee company, issued a show cause notice (SCN) under section 144 of the Act, dated 08/02/2024, wherein it was called upon to explain as to why the assessment in its case may not be framed to the best of his judgment under section 144 of the Act. In part compliance, the assessee company filed its objection to the purported framing of the assessment in its case under section 148 of the Act, vide its reply dated 12/02/2024.
SPR Publications Private Limited vs. ITO Thereafter, the AO issued a letter, dated 21/02/2024, rebutting the objections of the assessee company and directed it to comply with the various notices that were issued in its case, but the latter failed to come forth with any substantive reply/submissions. Accordingly, the AO allowed one more opportunity to the assessee company vide show cause notice (SCN), dated 21/02/2024 (seeking compliance by 26/02/2024). In response, the assessee company requested for adjournment of 5 days, which, however, was declined by the AO as the matter was going to be time-barred on 31/03/2024 and the assessee company had, on the earlier occasions consistently failed to avail the opportunities that were afforded to it to furnish the details. However, the AO, in all fairness, allowed the assessee company a period of 3 more days to submit its reply. In reply, the assessee company vide its submissions, dated 29/02/2024, furnished its return of income declaring a loss of Rs. (69,15,300/-) and also objected to the additions that were proposed by the AO to be made in its case.
Thereafter, the AO vide his order passed under section 147 r.w.s 144B of the Act, dated 15/03/2024, after making an addition under section 69A of the Act of Rs. 2,09,40,900/-, determined the income of the assessee company at the same amount.
The AO, while culminating the assessment, inter alia, initiated penalty proceedings under section 272A(1)(d) of the Act for non-
Thereafter, the AO vide his order under section 272A(1)(d) of the Act, dated 18/09/2024 imposed a penalty of Rs.10,000/- for each default of non-compliance to the statutory notices issued to the assessee company under section 142(1) of the Act, dated 26/07/2023, 09/10/2023 and 01/11/2023, and thus, saddled it with an aggregate penalty of Rs.30,000/-.
7. Thereafter, the assessment framed by the AO vide his order under section 147 r.w.s 144B of the Act, dated 15/03/2024, was assailed by the assessee company before the CIT(A), both on the issue of validity of the jurisdiction that was assumed by the AO for framing the assessment as well as the additions made in its case on merits.
Ostensibly, the assessee company had assailed the validity of the jurisdiction that was assumed by the AO for framing the assessment vide his order under section 147 r.w.s 144B of the Act, dated 15/03/2024 before the CIT(Appeals) for two reasons, viz., (i) that the initiation of the impugned proceedings vide notice issued under section 148 of the Act, dated 28/04/2022 by the Jurisdictional Assessing Officer (for short “JAO”) after coming into force the Faceless Scheme w.e.f 29/03/2022 could not be sustained and was liable to be quashed for want of valid
SPR Publications Private Limited vs. ITO assumption of jurisdiction; and (ii) that the AO had framed the assessment without obtaining the proper authorization from the specified authority as required per the mandate of section 151 of the Act.
As is discernible from the record, the CIT(A) while disposing of the appeal of the assessee company confined his adjudication qua the validity of the jurisdiction that was assumed by the AO for framing the impugned assessment vide his order under section 147 r.w.s 144B of the Act, 15/03/2024 based on the notice issued under section 148 of the Act, dated 28/04/2022 by the ACIT, Circle-3(1), Hyderabad, i.e., JAO. The CIT(A) drawing support from the judgment of the Hon’ble Jurisdictional High Court in the case of MPR Projects Private Limited vs. Assessment Unit (Telangana Unit), Writ Petition No.23491 of 2025, dated 16/10/2025, quashed the assessment for want of a valid assumption of jurisdiction. However, as the CIT(A) had quashed the assessment based on his aforesaid observations, therefore, he refrained from adverting to the other contentions that were advanced by the assessee company before him, both on the legality of the proceedings under section 147 of the Act, as well as the merits of the case, and, thus, partly allowed the appeal.
Ostensibly, the CIT(A), vide his order, dated 26/11/2025, had upheld the penalty imposed by the AO under section 272A(1)(d) of the
The assessee company aggrieved with the order of the CIT(A) upholding the penalty imposed by the AO under section 272A(1)(d) of the Act, dated 18/09/2024, has carried the matter in appeal before us.
We have heard the Learned Authorized Representatives of both parties, perused the orders of the authorities below, and the material available on record.
Shri P. Murali Mohan Rao, Learned Authorised Representative (for short, “Ld. AR”) for the assessee company, at the threshold of hearing of the appeal confined his contentions to the solitary issue, i.e., now when the assessment framed by the AO vide his order under section 147 r.w.s 144B of the Act, dated 15/03/2024 had been quashed by the CIT(A) vide his order, dated 08/12/2025, therefore, the penalty imposed by the AO under section 272A(1)(d) of the Act, the initiation of which finds its genesis in the impugned order of assessment which has been quashed and is no more in existence, cannot survive on a standalone basis and is destined to meet the same fate and is liable to be quashed.
Per contra, Shri Sankar Pandi P, Learned Senior Departmental Representative (for short, “Ld. Sr-DR”) relied upon the orders of the SPR Publications Private Limited vs. ITO authorities below. However, the Ld. DR on being confronted with the fact that now when assessment framed by the AO under section 147 r.w.s 144 of the Act, dated 15/03/2024 in itself had been quashed by the CIT(A) for want of valid assumption of jurisdiction, then on what basis the impugned penalty under section 272A(1)(d) of the Act, which in turn was initiated in the said assessment order can be sustained, failed to come forth with any reply.
We have given thoughtful consideration to the issue before us and find substance in the Ld. AR’s case that now when the impugned assessment framed by the AO under section 147 r.w.s 144B of the Act, dated 15/03/2024 had been quashed by the CIT(A) vide his order dated 08/12/2025 for want of valid assumption of jurisdiction, therefore, the impugned penalty imposed by the AO under section 272A(1)(d) of the Act, which in turn finds its genesis in the initiation in the impugned assessment order, which stands quashed, cannot survive on a standalone basis and has to meet the same fate. Our aforesaid view is fortified by a recent order of the Hon’ble High Court of Karnataka in Sri Appaji Health & Welfare Trust, Bangalore Vs. Income Tax Officer, Ward 3, Bangalore, Writ Petition No. 30612 of 2025 (T-IT), dated 10/10/2025. The Hon’ble High Court, while quashing the assessment order passed under Section 147 r.w.s.144 r.w.s 144B of the Act, dated: 07/03/2025 (Annexure A5), for want of a valid assumption of SPR Publications Private Limited vs. ITO jurisdiction as the same was based on the notice issued under Section 148 of the Act by the Jurisdictional Assessing Officer (JAO), as a consequence thereto had, inter alia, quashed the notice issued by the AO under Section 272A(1)(d) of the Act (Annexure A6).
We, thus, in terms of our aforesaid deliberations, quash the penalty imposed by the AO under section 272A(1)(d) of the Act.
Resultantly, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 21st January, 2026. S SdSd/-/- Sd/- Sd/- (मधुसूदन साव�डया) (रवीश सूद) (MADHUSUDAN SAWDIA) (RAVISH SOOD) लेखासद�य/ACCOUNTANT MEMBER �या�यकसद�य/JUDICIAL MEMBER d/-Sd Hyderabad, dated 21/01/2026. OKK/sps आदेशक���त�ल�पअ�े�षत/ Copy of the order forwarded to:- 1. �नधा�रती/The : SPR Publications Private Limited, C/o. 6-3-655/2/3, P. Murali & Co., Chartered Accountants, Somajiguda, Assessee Hyderabad, Telangana-500082. 2. राज�व/ The Revenue : Income Tax Officer, Ward-3(1), O/o. ITO, Ward- 3(1), Hyderabad, Telangana.
The Principal Commissioner of Income Tax, Hyderabad. 4. �वभागीय��त�न�ध, आयकरअपील�यअ�धकरण /DR,ITAT, Hyderabad.