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Facts
The Assessing Officer (AO) initiated assessment proceedings under section 147 based on cash deposits of Rs. 3,45,00,000. During the proceedings, the AO issued multiple notices under section 142(1) for non-compliance, leading to an ex-parte assessment and imposition of penalties under sections 271AAC and 272A(1)(d). The CIT(A) dismissed the appeals due to delay.
Held
The tribunal condoned the delay in filing the appeal. The tribunal held that multiple notices issued for the same issue within a short period constitute a single continuing default, not separate offenses. Therefore, penalty cannot be levied for each notice individually.
Key Issues
Whether the penalty imposed for non-compliance with multiple notices issued for the same issue can be levied separately for each notice? Whether the assessee had reasonable cause for non-compliance?
Sections Cited
272A(1)(d), 147, 148, 142(1), 144, 69, 271AAC, 273B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per B.M. Biyani, AM:
Feeling aggrieved by order of first-appeal dated 17.04.2025 passed by learned Commissioner of Income-tax (Appeals), NFAC, Delhi [“CIT(A)”] which in turn arises out of penalty-order dated 25.09.2023 passed by learned Assessment Unit of Income-tax Department [“AO”] u/s 272A(1)(d) of the Income-tax Act, 1961 [“Act”], the assessee has filed this appeal on following grounds:
“1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the order passed by Assessing Officer without giving proper opportunity of being heard resulting into violation of principal of natural justice.
On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of the Assessing Officer of imposing penalty of Rs. 30,000/- u/s 272A(1)(d) of the Act.
3. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of the AO of imposition of penalty as appellant had reasonable cause for non-compliance of the impugned notices.
4. The appellant craves leave to add any new ground of appeal
OR alter, amend OR DLEETE any of the above grounds of appeal.”
2. The background facts leading to present appeal are as under:
(i) The AO initiated proceeding of assessment u/s 147 through a notice dated 31.03.2022 u/s 148 to examine the cash deposits of Rs.
3,45,00,000/- having been made by assessee in a bank a/c. During such proceedings, the AO issued three notices dated 22.08.2022,
21.09.2022 and 11.10.2022 u/s 142(1) followed by letter/show- cause notice to assessee but finding non-compliances from assessee, the AO completed assessment ex-parte assessment u/s 144 vide assessment-order dated 06.03.2023 treating the deposits in bank a/c as unexplained investment u/s 69 and thereby determining total income at Rs. 3,45,00,000/-.
(ii) Simultaneously, the AO also initiated separate proceedings for imposition of penalties u/s 271AAC & 272A(1)(d). Ultimately, the AO passed separate penalty-orders imposing penalties u/s 271AAC &
272A(1)(d).
(iii) Aggrieved, the assessee filed three separate appeals, one against assessment-order and other two against respective penalty-orders
Page 2 of 5 A.Y. 2018-19 u/s 271AAC & 272A(1)(d) to CIT(A). However, the CIT(A) dismissed all three appeals in limine without adjudicating merits, on the ground of belated filing of appeals by assessee.
(iv) Still aggrieved, the assessee has come in next appeals before this bench of ITAT by way of three separate appeals, being to 535/Ind/2025.
25.09.2023 imposing a total penalty of Rs. 30,000/- @ Rs. 10,000/- for non-compliance of each of the three notices issued u/s 142(1).
At first, we note that the CIT(A) has dismissed assessee’s first-appeal on the ground of delayed filing by 395 days. Similar delay [but with changes in days of delay] also happened in other two appeals, being & 535/Ind/2025. This bench, vide two separate orders of even date authored by learned J.M., has taken a view to condone the delay in filing those appeals before CIT(A) [Para 4.3 of order of even date].
Respectfully following the same view as taken in other appeals, we condone the delay in filing of present appeal before CIT(A) and proceed to adjudicate present appeal on merits.
On merits, the assessee in present appeal is aggrieved by a penalty of Rs. 30,000/- imposed by AO for non-compliances of three (3) notices issued by AO u/s 142(1). The Ld. AR for assessee submitted that the AO issued three (3) successive notices dated 22.08.2022, 21.09.2022 and 11.10.2022 u/s 142(1) within a short gap of time for examining a single issue of cash deposit of 3,45,00,000/- having been made by assessee in bank a/c.
Accordingly, it was contended that where successive notices have been issued within a short span of time to examine a single issue, the alleged non-compliances partakes the character of a single continuing default and therefore the penalty cannot be levied separately for each notice. We find merit in the contention of the Ld. AR that where the notices have been issued by the AO, one after another, for examination of same issue, it will not multiply the default and it would constitute a single default. The object of section 272A(1)(d) is to ensure compliance and not to multiply penal consequences for a singular lapse arising out of the same cause. This proposition is supported by plethora of decisions including the recent decision dated 14.10.2025 given by ITAT, Pune Bench in Devraj Vishwasrao Jadhav Vs. ITO, Satara, ITA No. 1002/Pun/2025. Same view has also been accepted by this very bench in Ganpat Singh Vs. ITO- 3(1), Bhopal, ITA No.158/Ind/2025. Accordingly, in the light of same and also considering the provisions of section 273B of the Act, we are of the view that the penalty for first non-compliance deserves to be confirmed and for the subsequent non-compliances penalty deserves to be deleted. We,
Page 4 of 5 30,000/- imposed by AO, we uphold the penalty to the extent of Rs.
10,000/- and delete the balance penalty of Rs. 20,000/-.
Resultantly, this appeal is partly allowed.
Order pronounced in open court on 19/02/2026