Case Law Details
Anita Kesari Vs ITO (ITAT Indore)
The Indore Bench of the Income Tax Appellate Tribunal (ITAT) adjudicated two appeals filed by the assessee for Assessment Year 2017-18. Both appeals were delayed by 97 days. The assessee submitted affidavits seeking condonation of delay, explaining the reasons for late filing. The Revenue did not object to the condonation request. The Tribunal, after considering the explanations, found that the assessee had demonstrated “sufficient cause” under Section 253(5) of the Income-tax Act, 1961. Relying on the principle laid down by the Supreme Court in Collector, Land Acquisition vs. Mst. Katiji and Others, the Tribunal condoned the delay, admitted both appeals, and proceeded to decide them on merits.
In ITA No. 783/Ind/2025, the dispute related to a penalty of Rs. 2,26,020 imposed under Section 271AAC(1) in connection with an addition of Rs. 37,67,000 made under Section 69A read with Section 115BBE in reassessment proceedings. Both parties agreed that the assessee’s quantum appeal against the underlying assessment order had already been decided by the Tribunal through an earlier order dated 29 April 2025. In that order, the assessment had been set aside and restored to the Assessing Officer (AO) for framing a fresh assessment. Since the penalty proceedings were dependent upon the outcome of the quantum proceedings, the Tribunal held that the penalty issue could not be decided independently at that stage. Accordingly, in the interest of justice and with the consent of both parties, the Tribunal restored the penalty matter to the file of the AO for fresh adjudication after giving effect to the outcome of the quantum proceedings and after providing adequate opportunity of hearing to the assessee. The appeal was allowed for statistical purposes.
In ITA No. 784/Ind/2025, the Tribunal considered the validity of a penalty of Rs. 10,000 imposed under Section 272A(1)(d) for failure to comply with a notice issued under Section 142(1) during assessment proceedings. The assessee contended that the non-compliance occurred because the notice had been served electronically and no physical notice had been received. The Tribunal rejected this explanation, observing that the assessee was aware of the assessment proceedings, as demonstrated by the timely filing of the first appeal against the assessment order before the Commissioner (Appeals).
The Tribunal further noted that before imposing the penalty, the AO had granted multiple opportunities through notices dated 21 May 2023, 7 September 2023, and 28 September 2023. Despite these opportunities, the assessee neither complied with the notices nor furnished any response before the AO. Finding no infirmity in the AO’s action, the Tribunal upheld the penalty under Section 272A(1)(d) and dismissed the appeal as devoid of merit.
As a result, ITA No. 783/Ind/2025 was allowed for statistical purposes, while ITA No. 784/Ind/2025 was dismissed. The order was pronounced in open court on 21 May 2026.
FULL TEXT OF THE ORDER OF ITAT INDORE
The captioned two (2) appeals are filed by assessee, the details are as under:
(i) ITA No. 783/Ind/2025 is directed against the order of first-appeal dated 26.03.2025 passed by learned Commissioner of Income-tax (Appeals), NFAC, Delhi [“Ld. CIT(A)”], which in turn arises out of penalty-order dated 24.01.2024 passed by Assessment Unit of Income-tax Department [“Ld. AO”] u/s 271AAC(1) of the Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18.
(ii) ITA No. 784/Ind/2025 is directed against the order of first-appeal dated 26.03.2025 passed by learned Commissioner of Income-tax (Appeals), NFAC, Delhi [“Ld. CIT(A)”], which in turn arises out of penalty-order dated 15.11.2023 passed by Assessment Unit of Income-tax Department [“Ld. AO”] u/s 272A(1)(d) of the Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18.
2. The registry has informed that both of these appeals are delayed by 97 days and therefore time-barred. The assessee has filed separate applications/affidavits in both of these appeals for condonation of delays; the affidavits are worded identical, hence the affidavit filed in one of these appeals is scanned and re-produced for an immediate reference:
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The averments made by assessee in above affidavit, which are self-explanatory and which do not require repetition, were discussed and the Ld. DR for revenue does not have any objection if the bench condones delay and accordingly left it to the wisdom of bench. We have considered the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a “sufficient cause” for delay in filing present appeal. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a “sufficient cause” for not presenting appeal within prescribed time.
It is also a settled position by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice-oriented approach. Thus, taking into account the facts of case, the averments made in affidavit, the provision of section 253(5) and the decision of Hon’ble Supreme Court, we take a judicious view, condone delay, admit appeal and proceed with hearing.
ITA No. 783/Ind/2025:
3. Learned Representatives of both sides are ad idem that the present appeal pertains to penalty of Rs. 2,26,020/- imposed by the Ld. AO u/s 271AAC(1) in respect of addition of Rs. 37,67,000/- made u/s 69A r.w.s. 115BBE in the assessment-order dated 21.05.2023 passed u/s 147 r.w.s. 144 of the Act. It is further agreed by both sides that the quantum appeal filed by the assessee, being ITA No. 902/Ind/2024 against the aforesaid assessment-order, has already been adjudicated by this Bench vide order dated 29.04.2025 whereby the assessment has been set aside and restored to the file of the Ld. AO for framing a de novo assessment. Since the very foundation of the impugned penalty is dependent upon the outcome of the quantum proceedings, the fate of the penalty cannot be decided independently at this stage. Therefore, considering the consensus of both parties and in the interest of justice, we deem it proper to restore the present penalty matter also to the file of the Ld. AO for fresh adjudication in accordance with law after giving due effect to the outcome of the quantum proceedings and after affording adequate opportunity of hearing to the assessee. Accordingly, this appeal is allowed for statistical purposes.
ITA No. 784/Ind/2025:
4. We have heard learned Representatives of both sides and carefully perused the material available on record. Our findings are as under:
(i) The Ld. AO imposed penalty of Rs. 10,000/- u/s 272A(1)(d) vide penalty-order dated 15.11.2023 on account of assessee’s failure to comply with notice issued u/s 142(1) dated 23.01.2023 during the course of assessment proceedings. The explanation advanced by the Ld. AR is that the assessee failed to comply because the notice was issued electronically and no physical notice was served. In our considered view, the said explanation does not constitute a reasonable cause for non-compliance, particularly when the assessee was otherwise aware of the assessment proceedings, as evident from the fact that the assessee subsequently filed first appeal against the assessment-order before the Ld. CIT(A) within the prescribed time.
(ii) Further, before levying the impugned penalty, the Ld. AO afforded sufficient opportunities to the assessee through notices dated 21.05.2023, 07.09.2023 and 28.09.2023. However, despite such opportunities, the assessee remained non-compliant and failed to furnish any response before the Ld. AO. Consequently, the Ld. AO proceeded to impose penalty.
Therefore, we do not find any infirmity in the action of the Ld. AO in levying penalty u/s 272A(1)(d). Accordingly, this appeal filed by the assessee is dismissed being devoid of merit.
5. Resultantly, ITA No. 783/Ind/2025 is allowed for statistical purposes and ITA No. 784/Ind/2025 is dismissed.
Order pronounced in open court on 21/05/2026
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