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Facts
The assessee filed two appeals against the orders pertaining to quantum addition and penalty for AY 2012-13. The appeals were filed ex parte as the assessee was not conversant with taxation matters and solely depended on his tax consultant.
Held
The Tribunal held that ignorance of tax laws is not a valid excuse for non-compliance. However, in the interest of substantive justice, the impugned orders were set aside and the quantum assessment was remanded to the AO. The penalty appeal was allowed.
Key Issues
Whether ignorance of tax laws can be a valid excuse for non-compliance, and whether the quantum addition and penalty should be set aside and remanded.
Sections Cited
271(1)(c), 250, 147, 148, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “B”NEW DELHI
Before: SHRIMAHAVIR SINGH, HON’BLE & SHRISANJAY AWASTHI
सुनवाईक�तारीख/ Date of hearing: 15.12.2025 15.12.2025 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This is a batch of two appeals of the same assessee. Both these appeals are being disposed of through a single order for the sake of convenience. These appeals are respectively pertaining to the quantum addition and the penalty u/s 271(1)(c) of the Act.
1.1 The quantum appeal arises from order dated 29.05.2025 passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), Noida-2.The appeal on the penalty also arises from order dated 29.05.2025 by the same Ld. CIT(A).
Right at the outset, the Ld. AR mentioned that both the orders were ex parte before either of the authorities below for the reason that the assessee was not conversant with taxation matters and was solely dependent on his tax consultant, who does not appear to have kept the assessee informed about the pending proceedings. It was prayed that the lack of knowledge of taxation matters of the assessee should not lead to the assessee being unjustly penalized.
2.1 The Ld. DR relied on the orders of the authorities below but left it to the Bench to decide whether these matters deserve to be remanded back or not.
We have carefully considered the rival submissions and have gone through the records before us. It needs to be mentioned that in this case there can be no valid excuse for non-compliance before any of the authorities below on the ground of ignorance of tax laws. Also considerable resources of the I.T. Department would be expended in dealing with these matters and hence we impose a cost of Rs.5,000/- on the assessee payable to the Allahabad High Court Legal Services Committee (Legal Aid Cell), by 31.01.2026. Furthermore, in the interest of substantive justice, we set aside the impugned orders and remand the quantum back to the file of the Ld. AO for fresh assessment.
Accordingly, the penalty matter (ITA No.4672) is treated as allowed since the penalty would be deleted with the setting aside of the impugned order thereon. However, the Ld. AO would be at liberty to initiate the penalty proceedings again in case it is so required. is allowed and is allowed for statistical purposes.
Order pronounced in the open court on 15.12.2025