Karthikaraj Premalatha Vs ITO (ITAT Chennai)
The Chennai ITAT partly allowed the assessee’s appeal against the CIT(A), NFAC order dated 21.08.2025 concerning penalty under Section 272A(1)(d) of the Income-tax Act, 1961. The assessee had failed to comply with notices under Section 142(1) dated 09.08.2024 and 07.10.2024 seeking information relating to the sale of an immovable property. The AO treated the failures as separate defaults and imposed a penalty of ₹20,000, which the CIT(A) confirmed.
Before the Tribunal, the assessee submitted that there was sufficient cause for the non-compliance. The Department supported the orders of the lower authorities.
The Tribunal noted that the assessee appeared before the AO on 23.10.2024 and sought an adjournment. This subsequent appearance indicated that the assessee had not completely abandoned the assessment proceedings and supported the plea that a reasonable cause existed for the initial non-compliance with the 09.08.2024 notice. Accordingly, the Tribunal deleted the ₹10,000 penalty attributable to the first default.
However, regarding the second notice dated 07.10.2024, the assessee had neither produced material nor provided a satisfactory explanation demonstrating reasonable cause for continued non-compliance. The Tribunal held that subsequent appearance before the AO, without explaining the failure to comply with the second statutory notice, could not by itself absolve the assessee from the consequences under Section 272A(1)(d).
