BHAVIN MADUKARBAI SHAH,BHAVNAGAR V. THE ITO, WARD-1(2), BHAVNAGAR

ITA 1619/AHD/2025

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The case involves Bhavin Madukarbhai Shah, the appellant, who appealed against the penalty imposed by the Income Tax Officer (ITO) for non-compliance with notices under sections 142(1) and 143(2) of the Income Tax Act, 1961, during the scrutiny assessment of his income tax return for the assessment year 2022-23. The penalty of Rs. 20,000 was confirmed by the Commissioner of Income Tax (Appeals), which led to the filing of this appeal. The primary contention was the improper service of notices, which the department admitted during the proceedings. The Tribunal, considering the principles of natural justice and the facts presented, decided in favor of the assessee, leading to the cancellation of the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789210 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 25-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before: DR. BRR Kumar, Vice President And Shri T. R. Senthil Kumar, Judicial Member Bhavin Madukarbhai Shah RSN 171P6/1 V M Steel, Alang, Bhavnagar Gujarat-364081 PAN: CCBPS7617A (Appellant) Vs The ITO Ward-1(2), Bhavnagar (Respondent) Assessee Represented: Shri Mohit Balani, A.R. Revenue Represented: Shri Rohit Aasudani, Sr. D.R. Date of hearing : 12-11-2025 Date of pronouncement : 24-11-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 24.04.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the penalty levied under section 272A(1)(d) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2022-23. ITA No: 1619/Ahd/2025 Assessment Year: 2022-23 Printed from counselvise.com I.T.A No. 1619/Ahd/2025 A.Y. 2022-23 Page No Bhavin Madhukarbhai Shah vs. ITO 2 2. There is a delay of 56 days in filing the above appeal. The assessee stated though the impugned order was communicated to the assessee through email, the same was remained unnoticed by the assessee due to inadvertence and oversight mistake. Therefore in the interest of Principle of Natural Justice, the delay of 56 days in filing the appeal be condoned. We are satisfied with the reasons stated that in the affidavit and the delay of 56 days in filing the appeal is hereby condoned. 3. Brief facts of the case is that the assessee is an individual, filed his Return of Income for the Asst. Year 2022-23 on 23-09-2022 declaring total income of Rs. 14,79,610/-. The return was processed u/s. 143(1) and then taken for scrutiny assessment, as “Low income from TCS receipts – Scrap”. The assessee was issued with various notices which is said to be not received by the assessee. However a physical notice was sent on 18-09-2023 be Speed Post, wherein the assessee made a reply on 26-12-2023 without all necessary documents. Therefore the expenses of Rs.22,12,859/- claimed by the assessee was disallowed and added to the total income. The assessing officer also initiated penalty proceedings u/s 272A(1)(d) for non-compliance to the notices issued u/s 142(1) and u/s 143(2) of the Act. In response to the penalty proceedings, the assessee failed to reply to the notices, which has resulted in levying penalty of Rs.10,000/- each for non- compliance to notice issued u/s 143(2) dated 02-06-2023 and notice u/s 142(1) dated 06-06-2023. Printed from counselvise.com I.T.A No. 1619/Ahd/2025 A.Y. 2022-23 Page No Bhavin Madhukarbhai Shah vs. ITO 3 4. Aggrieved against the penalty order, assessee filed an appeal before Ld. CIT(A) who has confirmed the levy of penalty of Rs.20,000/- u/s. 272A(1)(d) of the Act. 5. Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal: 1. Learned CIT(A) has erred in law and on facts of the case in affirming imposition of penalty u/s 272A (1)(d) amounting to Rs.20,000/-. 2. The Learned CIT(A) has erred in law and on facts of the case in failing to appreciate that the penalty was imposed without proper service of notice and without granting adequate opportunity of hearing, thereby violating the principles of equity and natural justice. 3. The Learned CIT(A) has erred in law and on facts of the case in not appreciating that no penalty is leviable or sustainable under section 272A(1)(d) in view of judicial precedents directly on the issue 4. The Learned CIT(A) has erred in law and on facts of the case in sustaining the penalty, which is wrong, illegal and unjustified on the facts and in the circumstances of the appellant's case. 5. The Learned CIT(A) has erred in law and on facts of the case in passing an order which is bad in facts and in law and is fit to be cancelled 6. We have heard rival submissions and perused the materials available on record. It is seen from the assessment order that notice u/s 142(1) dated 06-06-2023 was not received by the assessee. Similarly u/s 143(2) notice dated 02-06-2023 was also not received by the assessee, which is admitted by the Ld. A.O. in the assessment order. However the physical notice dated 18-09- 2023 sent by Speed Post was replied by the assessee on 26-12- 2023, as can be seen from Page No. 2 of the assessment order which reads as follows: Printed from counselvise.com I.T.A No. 1619/Ahd/2025 A.Y. 2022-23 Page No Bhavin Madhukarbhai Shah vs. ITO 4 Type of Notice/ communic ation Date of Notice/Commu nication Date of complia nce given Respo nse of the assess ee receiv ed or not receiv ed Date of respo nse, if receiv ed Response type (Full/part/Adjou rnment Rema rks if any Notice u/s 143(2) 02-06-2023 17-06- 2023 Not Receiv ed NA NA NA Notice u/s 142(1) 06-06-2023 21-06- 2023 Not Receiv ed NA NA NA Notice u/s 142(1) 26-06-2023 03-07- 2023 Not Receiv ed NA NA NA Notice u/s 142(1) 12-06-2023 20-07- 2023 Not Receiv ed NA NA NA Letter to Assessee [AU-1] 25-07-2023 5 days Not Receiv ed NA NA NA Issued-Centralised communication in no-responstive case on 18.09.2023, which was sent by Speed Post No: JA2772797851N. The assessee replied on 26/12/2023. Notice u/s 142(1) 20-02-2024 26-02- 2024 Not Receiv ed NA NA NA Show Cause Notice 28-02-2024 06-03- 2024 Not Receiv ed NA NA NA 6.1. It is not a case of the department that the assessment has resulted in passing exparte assessment. It is the case of the assessee, the notices issued u/s 142(1) and u/s 143(2) were not served on the assessee which is being accepted by the department. Hence there is no question of levying penalty u/s 271A(1)(d) of the Act for non-compliance to the notices. Therefore the levy of penalty of Rs.20,000/- u/s. 271A(1)(d) is hereby deleted. Printed from counselvise.com I.T.A No. 1619/Ahd/2025 A.Y. 2022-23 Page No Bhavin Madhukarbhai Shah vs. ITO 5 7. In the result, the appeal filed by the Assessee is hereby allowed. Order pronounced in the open court on 24-11-2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 24/11/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद Printed from counselvise.com "