JAYANT SECURITY AND FINANCE LIMITED ,INDORE V. ACIT CENTRAL-2, BHOPAL

ITA 210/IND/2025

AI Insights

The case involves Jayant Security and Finance Ltd., the appellant, contesting a penalty of Rs. 10,000 imposed by the Assessing Officer (AO) for non-compliance in filing a return of income for the Assessment Year 2016-17. The penalty was confirmed by the CIT(A) but was later contested in the Income Tax Appellate Tribunal. The core issue revolved around the non-compliance with notices under sections 148 and 142(1) of the Income Tax Act, 1961, during the COVID-19 pandemic, which the appellant argued made compliance impossible. The Tribunal agreed with the appellant's contention, considering the extraordinary circumstances of the pandemic, and thus deleted the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785306 (ITAT-INDORE)
• Duration Of Justice: 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 22-02-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ILA PARMAR; DRWITHSHRINIHARSAHU
• Assessee Lawyers: SHRIHARSHVIJAYVARGIYA; THEDEPARTMENTWASNOTCALLEDFOR
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Non compliance
• Section: 148; 144; 142(1)

Judgement Text

"Page 1 of 8 आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE DR. MANISH BORAD, ACCOUNTANT MEMBER AND SHRI PARESH M JOSHI, JUDICIAL MEMBER ITA No. 210/Ind/2025 Assessment Year: 2016-17 Jayant Security and Finance Ltd., 852, Sudama Nagar, Infront of Jain Mandir, Indore बनाम/ Vs. ACIT Central-2 Bhopal (Assessee/Appellant) (Revenue/Respondent) PAN: AAAC4848G Assessee by Shri Harsh Vijayvargiya, AR Revenue by Ms. Ila Parmar, CIT-DR with Shri Nihar Sahu Date of Hearing 23.10.2025 Date of Pronouncement 30.10.2025 आदेश/ O R D E R Per Paresh M Joshi, J.M.: This is an appeal filed by the Assessee Under Section 253 of the Income Tax Act, 1961 (hereinafter referred to as the “Act” for sake of brevity) before this Tribunal. The assessee is aggrieved by order in first appeal Number: CIT(A)-3, Bhopal/IT/12222/2015- 16 dated 09.12.2024 passed by Ld. CIT(A), passed U/s 250 of the Act which is hereinafter referred to as the “impugned order”. Printed from counselvise.com Jayant Security & Finance Ltd. ITA No. 210/Ind/2025 A.Y. 2016-17 Page 2 of 8 The relevant Assessment Year is 2016-17 and the corresponding previous year period is from 01.04.2015 to 31.03.2016. 2. FACTUAL MATRIX 2.1 That as and by way of an assessment order made u/s 271(1)(b) of the Act, a penalty of Rs.10,000/-( Ten thousand only) was imposed on the assessee, as the assessee had committed the default within the meaning of section 271(1)(b) of the Act by not furnishing return of income as per the provision of section 148 of the Act within 07 days for A.Y.2016-17, in response to notice dated 20.03.2020. 2.2 As show cause notice u/s 271(1)(b) of the Act was issued on 08.02.2021 and the assessee was asked to furnish the explanation on or before 12.02.2021 for non filling of return of income for A.Y.2016-17. That the notice was duly served on the assessee. However, the assessee did not comply to the above notice. A reminder for filing of return was also issued to the assessee on 27.02.2021 but the assessee failed to furnish the return within due date. Printed from counselvise.com Jayant Security & Finance Ltd. ITA No. 210/Ind/2025 A.Y. 2016-17 Page 3 of 8 2.3 Considering the above facts the Ld. AO was satisfied that the assessee has committed the default within the meaning of section 271(1)(b) of the Act, by not furnishing return of income on or before due date for A.Y.2016-17 & consequently imposed penalty at Rs.10,000/- for A.Y.2016-17 u/s 271(1)(b) of the Act. 2.4 That the aforesaid order bears No.ITBA/PNL/F/271(1)(b)/2020-21/1031909289(1) & that the same is dated 30.03.2021 which is heareinafter referred to as the “Impugned Penalty Order.” 2.5 That the assessee being aggrieved by the “Impugned Penalty Order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “Impugned Order” has dismissed the first appeal of the assessee on the grounds and reasons stated therein. The core grounds and reasons for dimisseal of the first appeal was as under in the Impugned order:- “3.1.1. I have considered the penalty order, issues involved in assessment and the grounds of appeal raised by the assessee against the penalty order. In this case penalty of a sum of Rs.10,000/- was levied on appellant u/s 271(1)(b) of the 'Act'. During the search assessment proceedings it has been observed that the assessee did not comply to the notices and did not furnish any reply despite of numerous opportunities provided to the appellant. Accordingly, the AO held that the assessee has failed to comply with the notice under Printed from counselvise.com Jayant Security & Finance Ltd. ITA No. 210/Ind/2025 A.Y. 2016-17 Page 4 of 8 section (1) of Section 142 of the 'Act' and levied penalty of amount Rs 10,000/- u/s 271(1)(b)of the Act for the A.Y.2016-17 I find that the appellant has never filed any adjournment. During the COVID pandemic, the appellant should have filed reply or adjournment application before the assessing officer through e proceedings. Further, the Ld. AO has passed the assessment order u/s147 r.w.s 144 of the 1.T. Act which proves that the appellant was provided ample opportunities to substantiate its claim, however, despite several opportunities being granted from time to time, there has been absolutely non compliance on the part of the appellant to give detailed explanation regarding grounds of appeal taken for the year under consideration. The appellant's overall attitude towards compliance during assessment as well as penalty proceeding has been absolute non compliant. It is very unreasonable that repeatedly the appellant preferred not to comply to the notices issued by the Assessing Officer. Therefore, the claim of the appellant is not tenable. 3.1.2. In the present case, despite of providing ample opportunities by the AO, the assessee did not comply by furnishing requisite information. It shows lack of proper cooperation on the part of the appellant. The AO has given sufficient time to furnish reply and if the appellant convey the reason of reasonable delays then generally the AO always allows additional times. Besides, many a times it is the tactics of the appellant to delay the proceedings so that AO does not have much time left to complete the proceedings. The Act clearly envisages proper compliance on the part of the assessee so that assessment can be completed in time bound manner. Given the facts and circumstances of the case and the overall attitude of the assessee during assessment proceedings, I clearly find there is a fault on the part of the appellant and the AO has rightly invoked penalty uls 271(1)(b) of the Income tax Act for the relevant period. 3.1.3. In view of above discussions, I find that the appellant's attitude had been casual and irresponsible. There is no merit on the grounds raised by the appellant. Therefore, the levying of the above penalty is proper, fully justified and in accordance with the provisions under the Income Tax Act. Accordingly, the appeal on ground nos.1 & 2 are dismissed. 3.2. Ground No. 3: Being general in nature, this ground does not require any specific adjudication. 4. Accordingly the appeal is dismissed” Printed from counselvise.com Jayant Security & Finance Ltd. ITA No. 210/Ind/2025 A.Y. 2016-17 Page 5 of 8 2.6 That the assessee being aggrieved by the “Impugned Order” has preferred the instant second appeal before this Tribunal & has raised following grounds of appeal in Form no.36 against the “Impugned Order” which are as under: “1.That on the facts and in the circumstances of the case Ld. CIT (A)-3, Bhopal has erred in confirming the penalty levied by Ld. AO amounting to Rs. 10,000 U/s 271(1)(b) of Income Tax Act, 1961. 2.That on the facts and in the circumstances of the case Ld. AO has erred in passing and Ld. CIT (A)-3, Bhopal has erred in confirming the impugned order without affording any opportunity of being heard against the principles of natural justice. 3. That the appellant craves leave to add, amend, alter or delete all or any of the grounds of appeal and all the above grounds are mutually exclusive to reach other.” 3. Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 23.10.2025 when the Ld. AR for and on behalf of the assessee appeared before us & interalia contended that the “impugned order” is illegal, not proper and is bad in law. It thus deserves to Printed from counselvise.com Jayant Security & Finance Ltd. ITA No. 210/Ind/2025 A.Y. 2016-17 Page 6 of 8 be set aside. The Ld. AR has placed on record of this tribunal a compilation from pages 1 to 28. The Ld. AR contended that the relevant notice is dated 20.03.2020 & by that time Covid-19 had started hence the assessee cannot be blamed for non-compliance in such as extraordinary situation which was in the nature of force majure. Per contra the Ld. DR contended that the period under reference which is being discussed pertains to covid-19 wherein it was not possible for any one during covid-19 period to comply with any notice(s) issued by the Income Tax Department & hence the sympathetic view can be taken and the penalty imposed can be deleted by this Tribunal. 4. Observations & findings & conclusions 4.1 We now have to decide the legality, validity and proprietary of the “impugned order” basis records of the case. 4.2 We have perused the records of the case and have heard the rival contentions. Printed from counselvise.com Jayant Security & Finance Ltd. ITA No. 210/Ind/2025 A.Y. 2016-17 Page 7 of 8 4.3 We basis records of the case & after hearing & upon examining the contentions are of the considered view that period of compliance u/s 148 notice which was dated 20.03.2020 i.e. within 7 days from the date of receipt to file return of income falls within first phase of Covid-19 with nation-wise lockdown declared on 25.03.2020. The period of show cause notice dated 08.02.2021 u/s 271(1)(b) too falls under Covid-19 period. 4.4 In view of the aforesaid we hold that notice(s) be it under 148, 142(1) (date 27.02.2021 as per CIT(A) order) dated 8.02.2021 (supra) pertained to Covid-19 period & to expect due compliance on part of the assessee by the department was not called for & for assessee to do due compliance was impossible. Therefore, under these peculiar facts and circumstances of the case in hand we set aside the “Impugned order” and delete the penalty. Order 5. In the result “Impugned Order” is set aside and penalty at Rs.10,000/- u/s 271(1)(b) upheld in the impugned order is deleted. Printed from counselvise.com Jayant Security & Finance Ltd. ITA No. 210/Ind/2025 A.Y. 2016-17 Page 8 of 8 5.2 In view of the aforesaid the appeal of the assessee is allowed. Order pronounced by putting on notice board in terms of Rule 34 of ITAT, Rules, 1963, on 30.10.2025. Sd/- sd/- (DR. MANISH BORAD) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore िदनांक/Dated : 30 /10/2025 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore Printed from counselvise.com "