ANILA NARENDRA SANGANI,JAMNAGAR V. INCOME TAX OFFICER WARD 1(3) JAMNAGAR, JAMNAGAR

ITA 232/RJT/2025

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The case involves Anila Narendra Sangani, a proprietor of M/s Shreenathji Enterprise, who appealed against a penalty imposed by the Income Tax Officer for non-compliance with notices during the assessment proceedings for the Assessment Year 2013-14. The penalties were initially set at Rs.30,000 for each of the three defaults. The CIT(A) upheld the penalties, leading to the appeal before the Tribunal. The Tribunal found that the non-compliance was partly due to a mistake by the assessee's tax consultant and not entirely the fault of the illiterate assessee, who relied on the consultant for handling tax matters. Consequently, the Tribunal reduced the penalty for two of the defaults.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714590 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMR GUPTA
• Assessee Lawyers: CHETAN AGARWAL
• Keywords: Reasonable cause; Accommodation entries
• Section: 148; 142(1)

Judgement Text

"ITA No. 232/Rjt/2025 A.Y: 13-14 Anila N Sangani, Page | 1 आयकर अपीलȣय अͬधकरण,राजकोट Ûयायपीठ, राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, “SMC” RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.232/RJT/2025 Ǔनधा[रण वष[/Assessment Year : 2013-14 Anila Narendra Sangani, Plot No. E-69/70 Shreenathji Enterprise, GIDC Phase-2 Dared, Jamnagar-361006 बनाम/ Vs Income Tax Officer, Ward-1(3), Jamnagar, Taranjali Building, Income Tax Office, Nr. Amber Cinema, Pt. Nehru Marg, Hospital Rod, Jamanagar-361 008 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: BDUPS 0674 L (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Chetan Agarwal, AR राजèव कȧ ओर से/Revenue by : Shri Dheeraj Kumr Gupta, Sr-DR सुनवाई कȧ तारȣख /Date of Hearing : 14/05/2025 घोषणा कȧ तारȣख /Date of Pronouncement : 05/08/2025 आदेश/Order Per Dr. Arjun Lal Saini, A.M Captioned appeal filed by the assessee, pertaining to Assessment Year 2013-14, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income-tax (Appeals) [in short, “Ld.CIT(A)”], dated 24.03.2025, which in turn arises out of a penalty order passed u/s 271(1)(b) of the Act, on 15.09.2022. 2. The grounds of appeal raised by the assessee are as follows: “1. The Ld. CIT (A) erred in law as well as on fact in upholding penalty of Rs.30,000 imposed by ld. assessing officer u/s.271(1)(b) of the Act.” 3. Brief facts qua the issue are that assessee is a proprietor of M/s Shreenathji Enterprise and engaged in business of manufacturing of brass parts. The assessee Printed from counselvise.com ITA No. 232/Rjt/2025 A.Y: 13-14 Anila N Sangani, Page | 2 filed his return of income for A.Y. 2013-14, showing total income at Rs.2,57,100/-. Subsequently, the Investigation Wing of the Department has revealed that the proprietary concern account was used for rotation of funds and giving accommodation entries to the beneficiaries. The assessee has taken accommodation entries to the tune of Rs.4,52,27,117/-. The assessee`s case was opened after recording the reasons and obtaining prior approval for issuance of notice u/s 148 of the Act from Ld.PCIT, Jamnagar on 31.03.2021. In response thereto assessee did not reply. Thereafter, notice u/s 142(1) of the Act, were issued to assessee, three times. The assessee did not make compliance of these notices, therefore, penalty of Rs.30,000/- was imposed by assessing officer u/s 271(1)(b) of the Act, for each three defaults. 4. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before CIT(A). The CIT(A) observed that there is no dispute on failure of assessee to comply with the notices issued u/s 142(1) of the Act during the assessment proceedings, on various dates. The Ld. CIT(A) held that appellant has not been able to show a reasonable cause even during the appellate proceedings. The appellant was having a registered account on the e-filing portal which was active because assessee is using it for filing returns of income. Hence, the Ld.CIT(A) dismissed the appeal and confirmed the levy of penalty of Rs.30,000/- for three occasions, (non-compliance), as the appellant failed to adduce any valid reason for such failure. 5. Aggrieved by the order of Ld. CIT(A), the assessee filed present appeal before the Tribunal. 6. The Ld. Counsel for the assessee, at the outset stated that assessee’s case under consideration, the penalty imposed by Assessing Officer u/s 271(1)(b) of the Act is on account of non-compliance of notice during assessment Printed from counselvise.com ITA No. 232/Rjt/2025 A.Y: 13-14 Anila N Sangani, Page | 3 proceedings and Assessing Officer imposed penalty of Rs.30,000/- on account of three defaults. The Ld. Counsel for the assessee stated that in subsequent default, assessee has made compliance. Therefore, penalty may be imposed only Rs.10,000/- for one time default and for remaining two defaults the penalty of Rs.20,000/- may be deleted. 7. On the other hand, Ld.Senior DR for the Revenue submitted that penalty imposed by Assessing Officer regarding three defaults of Rs.30,000/-, u/s 271(1)(b) of the Act, should be confirmed. 8. I have heard both the parties and perused the materials available on record. Before me, Ld. Counsel for the assessee submitted that due to mistake of the Ld. Counsel of the assessee, the notices of hearing issued during assessment proceedings were not complied by assessee, under consideration. The assessee is illiterate person and a farmer so he does not know the income tax proceedings and he solely dependent on his tax consultant. I note that the tax consultant has committed the mistake and did not reply, to the first notice, issued during assessment proceedings. Therefore, I note that penalty u/s 271(1)(b) of the Act should be imposed for one time default only; as the assessee made subsequent compliance. Therefore, I delete penalty for two defaults and I direct the Assessing Officer to impose Rs.10,000/-, as a penalty u/s 271(1)(b) of the Act, on the assessee. This ground of assessee’s appeal is partly allowed. 9. In the result, assessee’s appeal is partly allowed. Order pronounced in the open court on 05/08/2025. Sd/- (Dr. A.L. SAINI) लेखा सदÖय/ACCOUNTANT MEMBER राजकोट /Rajkot Ǒदनांक/ Date: 05/08/2025 DKP Outsourcing Sr.P.S Printed from counselvise.com ITA No. 232/Rjt/2025 A.Y: 13-14 Anila N Sangani, Page | 4 आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to :  अपीलाथȸ/ The Appellant  Ĥ×यथȸ/ The Respondent  आयकर आयुÈत/ CIT  आयकर आयुĉ(अपील)/ The CIT(A)  ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, राजकोट/ DR, ITAT, RAJKOT  गाड[ फाईल/ Guard File By order/आदेश से, // True Copy // सहायक पंजीकार आयकर अपीलȣय अͬधकरण, राजकोट Printed from counselvise.com "