GEETA CHADHA,LUDHIANA V. DEPUTY COMMISSIONER OF INCOME TAX, CENTRE CIRCLE-1, JALANDHAR

ITA 51/ASR/2025

AI Insights

The case involves two appeals by Sumesh Chadha and Smt. Geeta Chadha against the orders of the Commissioner of Income Tax (Appeals)-5, Ludhiana, which upheld the penalty imposed by the Deputy Commissioner of Income Tax, Jalandhar, for non-compliance with notices under section 142(1) of the Income Tax Act, 1961. The penalties were initially set at Rs. 50,000 each. The appellants argued that the penalties were unjust as they had valid reasons for their non-compliance, primarily due to health issues in the family. The tribunal found that the appellants had provided reasonable cause for their non-compliance, leading to the quashing of the penalties.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396629 (ITAT-AMRITSAR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHARAN DASS
• Assessee Lawyers: SHRUTI KHANDELWAL
• Keywords: Opportunity of being heard; Reasonable cause
• Section: 147; 143(3); 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. UDAYAN DAS GUPTA, JUDICIAL MEMBER AND SH. BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER I.T.A. No. 50/Asr/2025 Assessment Year: 2014-15 Sumesh Chadha, C/o Benepal Service Station, Transport Nagar, Ludhiana, Punjab. [PAN:-ABFPC1459B] (Appellant) Vs. CIT, C.C.-1, Jalandhar. (Respondent) I.T.A. No. 51/Asr/2025 Assessment Year: 2014-15 Smt. Geeta Chadha, 704/9, Gurdev Nagar, Ludhaina, Punjab. [PAN:-ABFPC1460L] (Appellant) Vs. CIT, C.C.-1, Jalandhar. (Respondent) Appellant by Ms. Shruti Khandelwal, Adv. Respondent by Sh. Charan Dass, Sr. DR Date of Hearing 20.05.2025 Date of Pronouncement 29.05.2025 ORDER Per:Brajesh Kumar Singh, AM: The instant appeals of the different assessee were filed against the order of the ld. Commissioner of Income Tax (Appeals)-5, Ludhiana, [in brevity the ‘CIT I.T.A. Nos. 50 and 51/Asr/2025 Assessment Year: 2014-15 2 (A)’], order passed u/s 250 (6) of the Income Tax Act 1961, [in brevity ‘the Act’] for A.Y. 2014-15 dated 08.11.2024 separately. The impugned order was emanated from the order of the ld. DCIT, C.C.-1, Jalandhar, order passed u/s 271(1)(b) of the Act. dated 20.09.2023 respectively. 2. At the outset both the appeals are related to penalty order u/s 271(1)(b) of the Act of the different assessee. Fact and issue in both the appeals are similar in nature, therefore, for the sake of convenience, ITA No. 50/Asr/2025 is taken as lead case. The assessee has taken the following grounds: “1. That on the facts, circumstances and legal position of the case, Worthy CIT(A), Ludhiana in Appeal No. 10876/2013- 14/IT/CIT(A)-5/Ldh has erred in passing order dtd. 19.10.2023 in contravention of provisions of S. 250 of the Income Tax Act, 1961 (hereinafter referred to as “Act”). 2. That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO of imposition of penalty u/s 271(l)(b) of Rs. 50,000/-on account of alleged non-compliance to the notice(s) issued during the assessment proceedings. 3. That on facts, circumstances and circumstances of the case, Worthy CIT(A) has erred in confirming the actions of Ld. AO of levying penalty of Rs. 50,000/-u/s 271(l)(b) without considering the provisions of s. 274 of the Act and without I.T.A. Nos. 50 and 51/Asr/2025 Assessment Year: 2014-15 3 recording the necessary satisfaction while initiating the said proceedings. 4. That on facts, circumstances and legal position of the case, the impugned order passed by the Ld. AO u/s 271(l)(b) and then by Worthy CIT(A) u/s 250 deserves to be quashed since the same have been passed without affording reasonable opportunity of being heard to the appellant. 5. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.” 3. Brief fact of the case is that the assessee’s case was processed and the notices u/s 142(1) on five different dated 25.02.2022, 13,03.2022, 18.01.2023, 01.02.2023 and 15.02.2023 were served. The said notices were not complied by the assessee, so, the notice u/s 271(1)(b) dated 31.03.2023 was issued due to non- compliance of the notices u/s 142(1) of the Act. But on the date of hearing no compliance was made and none was appeared before the revenue. So, the ld. AO passed the penalty order and levied penalty u/s 271(1) (b) amount of Rs.50,000/-. Aggrieved assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) upheld the order of the ld. AO. Being aggrieved, the assessee filed an appeal before us. I.T.A. Nos. 50 and 51/Asr/2025 Assessment Year: 2014-15 4 4. During hearing the ld. AR filed written submission which is kept in the record. The ld. AR placed that there is a specific cause and inability for the assessee for non-compliance the notices u/s 142(1). The ld. AR had made argument and placed the reason in para 6 and 7 of APB which are reproduced as below: 6. Following is the sequence of events of issuing notice / order by the Id. AO during the quantum proceedings which were concluded u/s 153C r.w.s. 143(3) on 31.03.2023 after taking into account the submissions filed by the appellant :- Date Event Response filed by the Appellant 04.02.2022 Notice u/s 153C was issued. Return filed on 04.03.2022 (Copy of screenshot of reply filed appended herewith} 25.02.2022 Detailed questionnaire u/s 142(1) was issued. Request for adjournment filed on 04.03.2022. (Copy of screenshot of reply filed appended herewith) 05.03.2022 Notice u/s 142(1) was issued asking the assessee to file return u/s 153C. Reply filed on 11.03.2022 and 12.03.2022 requesting the Id. AO to stay the proceedings in light of interim order passed by the Hon’ble P&H HC. (Copy of screenshot of reply filed appended herewith) 13.03.2022 Notice u/s 142(1) was issued mentioning that proceedings u/s 147 was I.T.A. Nos. 50 and 51/Asr/2025 Assessment Year: 2014-15 5 filed before initiating 153C, hence in light of stay granted by Hon’ble HC the proceedings u/s 147 are dropped and proceedings u/s 153C are validly initiated as per the attached copy of satisfaction note dtd. 04.02.2022 and typed copy of order sheet for proceedings u/s 148. 29.06.2022 Notice u/s 143(2) issued. 18.01.2023 Notice u/s 142(1) was issued asking the assessee to provide details as per notice dtd. 25.02.2022. No reply filed. 01.02.2023 Notice u/s 142(1) was issued asking the assessee to provide details as per notice dtd. 25.02.2022. No reply filed. 15.02.2023 Notice u/s 142(1) was issued asking the assessee to provide details as per notice dtd. 25.02.2022. No reply filed. 01.03.2023 Notice u/s 142(1) was issued asking the assessee to provide details as per notice dtd. 25.02.2022. Complete reply along with documentary evidences filed by the assessee on 04.03.2023. (Copy of screenshot of reply filed appended herewith} 18.03.2023 Notice u/s 142(1) for providing documents as per notice dtd. 25.02.2022 and alleging the that no compliance had been made by the assessee till 04.03.2023. The assessee vide reply dtd. 22.03.2023 filed objections and explanation to the jewellery found seized. (Copy of screenshot of reply filed appended herewith} 23.03.2023 Objections filed by the assessee disposed. The assessee filed copy of order passed u/s 143(3) vide reply dtd. 25.03.2023. 31.03.2023 Order u/s 153C r.w.s. 143(3) was passed. I.T.A. Nos. 50 and 51/Asr/2025 Assessment Year: 2014-15 6 7. From the above table it is evident that the assessee did not persistently defy the statutory notices issued by the Id. AO. The compliance was admittedly delayed at three occasions, but eventually full replies along with supporting documents were submitted on 04.03.2023 and thereafter. Regarding the non-filing of submission on some occasions, it is submitted that the wife of the appellant had been diagnosed with cancer and to look after her, he could not adhere to the timelines. But then immediately thereafter, he filed complete replies which have been acknowledged by the Ld. AO.” 5. The ld. DR vehemently argued and fully relied on the order of the revenue authorities. 6. We heard the rival submission and relied on the documents available in the record. The assessee has explained the reasonable cause for noncompliance of the notice u/s 142(1). The assessee was incapable to follow the notice and to appear before the ld. AO. The wife of the appellant had been diagnosed with cancer and to look after her, is also valid reason for noncompliance of the notices, issued by the revenue. We accept the reasonable cause for nonappearance before the ld. AO. Accordingly, the penalty u/s 271(1)(b) is quashed. 7. Facts and issue are similar in both the cases, so, our observation in ITA No. 50/Asr/2025 is mutatis mutandis applicable on the ITA No. 51/Asr/2025 and will be followed accordingly. I.T.A. Nos. 50 and 51/Asr/2025 Assessment Year: 2014-15 7 8. In the result, both the appeals of the assessees are allowed. Order pronounced in the open court on 29.05.2025 Sd/- Sd/- (Udayan Das Gupta) (Brajesh Kumar Singh) Judicial Member Accountant Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order "