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Facts
The assessee, an agriculturist and school peon from a rural area, was levied a penalty of ₹20,000 under Section 271(1)(b) for non-response to notices issued under Section 142(1) for AY 2015-16. The notices were sent to his tax consultant's email, but the consultant failed to inform the assessee, who was not conversant with online processes.
Held
The Tribunal found that the assessee had a reasonable cause for the non-compliance, given his background and reliance on the consultant. Invoking Section 273B, the Tribunal deleted the penalty imposed under Section 271(1)(b) and set aside the CIT(A)'s order, thus allowing the appeal.
Key Issues
Whether penalty under Section 271(1)(b) for non-response to notices is leviable when the assessee proves reasonable cause under Section 273B due to a tax consultant's oversight.
Sections Cited
271(1)(b), 142(1), 250, 273B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE “A” BENCH : PUNE
Before: DR. MANISH BORAD & SHRI VINAY BHAMORE
I.T.A.No.2301/PUN/2025 (Assessment Year 2015-2016) Bhaskar Rajaram Thorat, ITO, Ward-2(1), Nashik Madhyamik Vidayalay, vs. Villholi, Nashik-422001, Maharashtra. PAN : AJPPT 0632 H (Appellant) (Respondent) For Assessee : Shri Chinmayy Pathak (virtual) For Revenue : Shri R.Y. Balawade, Addl.CIT Date of Hearing : 29.01.2026 Date of Pronouncement : 30.01.2026 ORDER PER : MANISH BORAD, AM
This appeal at the instance of the assessee is directed against the order of Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] dated 19/08/2025 passed under section 250 of the Income Tax Act, 1961 (“Act”) which is arising out of penalty order dated 11.01.2024 passed u/s. 271(1)(b) of the Act for the Assessment Year (AY) 2015-16.
The sole grievance of the assessee is against the levy of penalty u/s. 271(1)(b) of the Act at ₹ 20,000/- for not responding to the notices issued u/s. 142(1) of the Act.
2 ITA.No.2301/PUN./2025 (Bhaskar Rajaram Thorat) 3. At the outset, learned counsel for the assessee submitted that assessee is an agriculturist living in a village and dependent on the Tax Consultant for looking-after the income tax assessment proceedings. The Tax Consultant did not inform about the notices sent on his e-mail ID ‘mangalp197012@gmail.com’, due to which assessee could not respond to the notices. Prayer is made for deletion of impugned penalty.
On the other hand, Ld. Departmental Representative (DR) supported the order of Ld.CIT(A).
We have heard rival contentions and perused the records placed before us. We observe that assessee is an individual and the assessment proceedings for the A.Y. 2015-16 have been carried out. During the course of assessment proceedings, notices u/s. 142(1) were sent on 24.01.2023 & 05.04.2023 to which there was no reply. Ld.AO invoked section 271(1)(b) of the Act and levied penalty of ₹ 10,000/- for each default, thereby levying penalty of ₹ 20,000/- on the assessee. We, on going through the contention of the assessee and the submissions made before the lower authorities, find that the assessee is basically peon in a school and is from agricultural family and residing in mofussil area at village Villholi and not conversant with the income tax portal and e-mails. Also notices of hearing were sent by the Ld.AO on the email ID of Income Tax practitioner at 3 ITA.No.2301/PUN./2025 (Bhaskar Rajaram Thorat) mangalp197012@gmail.com. Apparently, the assessee has not been informed about the said two notices. We find that the assessee has made out a case that there was a reasonable cause for the said failure. Under these facts and circumstances, we find that the provisions of section 273B of the Act comes to the rescue of the assessee which provides that no penalty shall be imposable on the person or the assessee, as the case may be for any failure referred in the penalty provisions mentioned in section 273B of the Act, if he proves that there was a reasonable cause for the said failure. We, therefore, hold that the assessee deserves relief in the light of the provisions u/s. 273B of the Act. Accordingly, finding of the Ld.CIT(A) is set aside and penalty u/s. 271(1)(b) of the Act is deleted. Grounds of appeal raised by the assessee are allowed.
In the result, appeal of the Assessee is allowed.