GEETA CHADHA,LUDHIANA vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRE CIRCLE-1, JALANDHAR
Facts
The assessees were levied a penalty of Rs. 50,000/- each under Section 271(1)(b) for non-compliance with notices issued under Section 142(1) during assessment proceedings for A.Y. 2014-15. The CIT(A) upheld the penalty. The assessees appealed, citing that their non-compliance was due to the appellant's wife being diagnosed with cancer.
Held
The Tribunal found that the assessees had a reasonable cause for the non-compliance, specifically the appellant's wife's cancer diagnosis and the need to care for her. This situation rendered the assessees incapable of fully complying with the notices and appearing before the AO. Therefore, the penalty imposed under Section 271(1)(b) was quashed.
Key Issues
Whether the penalty levied under Section 271(1)(b) for non-compliance with statutory notices can be quashed if the assessee demonstrates a reasonable cause, such as a serious family illness.
Sections Cited
Section 250(6) of the Income Tax Act 1961, Section 271(1)(b) of the Income Tax Act 1961, Section 142(1) of the Income Tax Act 1961, Section 274 of the Income Tax Act 1961, Section 153C of the Income Tax Act 1961, Section 143(3) of the Income Tax Act 1961, Section 147 of the Income Tax Act 1961, Section 148 of the Income Tax Act 1961, Section 143(2) of the Income Tax Act 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: SH. UDAYAN DAS GUPTA & SH. BRAJESH KUMAR SINGH
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. UDAYAN DAS GUPTA, JUDICIAL MEMBER AND SH. BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER I.T.A. No. 50/Asr/2025 Assessment Year: 2014-15 Sumesh Chadha, C/o Benepal Vs. CIT, C.C.-1, Service Station, Transport Jalandhar. Nagar, Ludhiana, Punjab. [PAN:-ABFPC1459B] (Respondent) (Appellant)
I.T.A. No. 51/Asr/2025 Assessment Year: 2014-15 Smt. Geeta Chadha, Vs. CIT, C.C.-1, 704/9, Gurdev Nagar, Ludhaina, Jalandhar. Punjab. [PAN:-ABFPC1460L] (Respondent) (Appellant)
Appellant by Ms. Shruti Khandelwal, Adv. Respondent by Sh. Charan Dass, Sr. DR
Date of Hearing 20.05.2025 Date of Pronouncement 29.05.2025
ORDER Per:Brajesh Kumar Singh, AM: The instant appeals of the different assessee were filed against the order of the ld. Commissioner of Income Tax (Appeals)-5, Ludhiana, [in brevity the ‘CIT
I.T.A. Nos. 50 and 51/Asr/2025 2 Assessment Year: 2014-15 (A)’], order passed u/s 250 (6) of the Income Tax Act 1961, [in brevity ‘the Act’] for A.Y. 2014-15 dated 08.11.2024 separately. The impugned order was emanated from the order of the ld. DCIT, C.C.-1, Jalandhar, order passed u/s 271(1)(b) of the Act. dated 20.09.2023 respectively. 2. At the outset both the appeals are related to penalty order u/s 271(1)(b) of the Act of the different assessee. Fact and issue in both the appeals are similar in nature, therefore, for the sake of convenience, ITA No. 50/Asr/2025 is taken as lead case. The assessee has taken the following grounds: “1. That on the facts, circumstances and legal position of the case, Worthy CIT(A), Ludhiana in Appeal No. 10876/2013- 14/IT/CIT(A)-5/Ldh has erred in passing order dtd. 19.10.2023 in contravention of provisions of S. 250 of the Income Tax Act, 1961 (hereinafter referred to as “Act”). 2. That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO of imposition of penalty u/s 271(l)(b) of Rs. 50,000/-on account of alleged non-compliance to the notice(s) issued during the assessment proceedings. 3. That on facts, circumstances and circumstances of the case, Worthy CIT(A) has erred in confirming the actions of Ld. AO of levying penalty of Rs. 50,000/-u/s 271(l)(b) without considering the provisions of s. 274 of the Act and without
I.T.A. Nos. 50 and 51/Asr/2025 3 Assessment Year: 2014-15 recording the necessary satisfaction while initiating the said proceedings. 4. That on facts, circumstances and legal position of the case, the impugned order passed by the Ld. AO u/s 271(l)(b) and then by Worthy CIT(A) u/s 250 deserves to be quashed since the same have been passed without affording reasonable opportunity of being heard to the appellant. 5. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.”
Brief fact of the case is that the assessee’s case was processed and the 3. notices u/s 142(1) on five different dated 25.02.2022, 13,03.2022, 18.01.2023, 01.02.2023 and 15.02.2023 were served. The said notices were not complied by the assessee, so, the notice u/s 271(1)(b) dated 31.03.2023 was issued due to non- compliance of the notices u/s 142(1) of the Act. But on the date of hearing no compliance was made and none was appeared before the revenue. So, the ld. AO passed the penalty order and levied penalty u/s 271(1) (b) amount of Rs.50,000/-. Aggrieved assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) upheld the order of the ld. AO. Being aggrieved, the assessee filed an appeal before us.
I.T.A. Nos. 50 and 51/Asr/2025 4 Assessment Year: 2014-15 4. During hearing the ld. AR filed written submission which is kept in the
record. The ld. AR placed that there is a specific cause and inability for the
assessee for non-compliance the notices u/s 142(1). The ld. AR had made
argument and placed the reason in para 6 and 7 of APB which are reproduced as
below: 6. Following is the sequence of events of issuing notice / order by the Id. AO during the quantum proceedings which were concluded u/s 153C r.w.s. 143(3) on 31.03.2023 after taking into account the submissions filed by the appellant :-
Date Event Response filed by the Appellant 04.02.2022 Notice u/s 153C was Return filed on 04.03.2022 issued. (Copy of screenshot of reply filed appended herewith} 25.02.2022 Detailed questionnaire u/s Request for adjournment 142(1) was issued. filed on 04.03.2022. (Copy of screenshot of reply filed appended herewith) 05.03.2022 Notice u/s 142(1) was Reply filed on 11.03.2022 issued asking the assessee and 12.03.2022 requesting to file return u/s 153C. the Id. AO to stay the proceedings in light of interim order passed by the Hon’ble P&H HC. (Copy of screenshot of reply filed appended herewith) 13.03.2022 Notice u/s 142(1) was issued mentioning that proceedings u/s 147 was
I.T.A. Nos. 50 and 51/Asr/2025 5 Assessment Year: 2014-15 filed before initiating 153C, hence in light of stay granted by Hon’ble HC the proceedings u/s 147 are dropped and proceedings u/s 153C are validly initiated as per the attached copy of satisfaction note dtd. 04.02.2022 and typed copy of order sheet for proceedings u/s 148. 29.06.2022 Notice u/s 143(2) issued. 18.01.2023 Notice u/s 142(1) was No reply filed. issued asking the assessee to provide details as per notice dtd. 25.02.2022. 01.02.2023 Notice u/s 142(1) was No reply filed. issued asking the assessee to provide details as per notice dtd. 25.02.2022. 15.02.2023 Notice u/s 142(1) was No reply filed. issued asking the assessee to provide details as per notice dtd. 25.02.2022. 01.03.2023 Notice u/s 142(1) was Complete reply along with issued asking the assessee documentary evidences to provide details as per filed by the assessee on notice dtd. 25.02.2022. 04.03.2023. (Copy of screenshot of reply filed appended herewith} 18.03.2023 Notice u/s 142(1) for The assessee vide reply providing documents as per dtd. 22.03.2023 filed notice dtd. 25.02.2022 and objections and explanation alleging the that no to the jewellery found compliance had been made seized. by the assessee till (Copy of screenshot of 04.03.2023. reply filed appended herewith} 23.03.2023 Objections filed by the The assessee filed copy of assessee disposed. order passed u/s 143(3) vide reply dtd. 25.03.2023. 31.03.2023 Order u/s 153C r.w.s. 143(3) was passed.
I.T.A. Nos. 50 and 51/Asr/2025 6 Assessment Year: 2014-15
From the above table it is evident that the assessee did not persistently defy the statutory notices issued by the Id. AO. The compliance was admittedly delayed at three occasions, but eventually full replies along with supporting documents were submitted on 04.03.2023 and thereafter. Regarding the non-filing of submission on some occasions, it is submitted that the wife of the appellant had been diagnosed with cancer and to look after her, he could not adhere to the timelines. But then immediately thereafter, he filed complete replies which have been acknowledged by the Ld. AO.” 5. The ld. DR vehemently argued and fully relied on the order of the revenue
authorities.
We heard the rival submission and relied on the documents available in the
record. The assessee has explained the reasonable cause for noncompliance of the
notice u/s 142(1). The assessee was incapable to follow the notice and to appear
before the ld. AO. The wife of the appellant had been diagnosed with cancer and to
look after her, is also valid reason for noncompliance of the notices, issued by the
revenue. We accept the reasonable cause for nonappearance before the ld. AO.
Accordingly, the penalty u/s 271(1)(b) is quashed.
Facts and issue are similar in both the cases, so, our observation in ITA No.
50/Asr/2025 is mutatis mutandis applicable on the ITA No. 51/Asr/2025 and will
be followed accordingly.
I.T.A. Nos. 50 and 51/Asr/2025 7 Assessment Year: 2014-15 8. In the result, both the appeals of the assessees are allowed.
Order pronounced in the open court on 29.05.2025 Sd/- Sd/-
(Udayan Das Gupta) (Brajesh Kumar Singh) Judicial Member Accountant Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order
