Gaddeppa Santhosh Vs ITO (ITAT Bangalore )
Bangalore ITAT deleted a penalty of ₹30,000 levied under Section 271(1)(b) for non-compliance with notices. The assessee, a pujari and astrologer with largely cash-based income, had failed to respond to multiple notices during reassessment proceedings initiated due to substantial cash deposits.
The Tribunal observed that the assessee was not a regular taxpayer, lacked awareness of income tax procedures, and became aware of proceedings only after receiving a substantial demand. It also noted that the quantum addition itself had been restored to the AO by CIT(A), indicating the matter was still unsettled.
Accepting the explanation as a “reasonable cause” under Section 273B, the ITAT held that mere non-appearance without deliberate defiance does not justify penalty. Accordingly, the penalty of ₹30,000 (₹10,000 per default) was deleted in full.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. ITA No. 2534/Bang/2025 is filed by Gaddeppa Santhosh (the assessee/appellant) against the appellate order passed by the National Faceless Appeal Centre, Delhi for assessment year 2015-16 dated 31stOctober 2025 wherein the assessee filed an appeal against the penalty order passed under Section 271(1)(b) of the Income Tax Act, 1961 (the Act) passed by the Assessment Unit Income Tax Department on 21stAugust 2023 was dismissed.
