KALAIARASAN SELVARAJ,SALEM V. ITO, WARD 1(6), SALEM, SALEM

ITA 3448/CHNY/2025

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The case involves Kalaiarasan Selvaraj, the appellant, who appealed against the penalty confirmed by the Learned Commissioner of Income Tax (Appeal)/NFAC, Delhi, for the Assessment Year 2020-21. The penalty was levied under section 271B of the Income Tax Act, 1961 for the non-filing of the Tax Audit Report (TAR) within the due date as required under section 44AB of the Act. The assessee filed his return of income along with the TAR on 12.09.2024, which was after the due date but before the assessment order was passed on 27.12.2024. The Tribunal noted that the delay was due to the COVID-19 pandemic, which was a reasonable cause for the belated filing, and thus, the penalty was not justified.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 833684 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Appeal Filed On: 25-11-2025
• Other Referred Cases: P. Senthil Kumar v. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR CHANDAN
• Assessee Lawyers: T.S.LAKSHMI
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

"आयकर अपीलीय अिधकरण, ’सी’ \u0001यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0001ी एबी टी. वक , ाियक सद\u0011 एवं एवं एवं एवं \u0001ी एस. आर. रघुनाथा, लेखा सद क े सम\u001b BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI S.R.RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.3448/Chny/2025 िनधा\u000eरण वष\u000e/Assessment Year: 2020-21 Kalaiarasan Selvaraj, 13-5-4A, Bazaar Street, Mecheri, Mettur, Salem-636 453. [PAN: AWKPK 1474 C] v. The ITO, Ward-1(6), Salem. (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent) अपीलाथ\u0016 क\u001a ओर से/ Appellant by : Mr.T.S. Lakshmi Venkatraman, FCA \u0017\u0018यथ\u0016 क\u001a ओर से /Respondent by : Mr.Kumar Chandan, JCIT सुनवाईक\u001aतारीख/Date of Hearing : 20.01.2026 घोषणाक\u001aतारीख /Date of Pronouncement : 04.02.2026 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeal)/NFAC, (hereinafter referred to as ‘Ld.CIT(A)‘), Delhi, dated 10.11.2025 for the Assessment Year (hereinafter referred to as ‘AY‘) 2020-21. 2. The main grievance of the assessee is against action of the Ld.CIT(A) confirming the penalty levied by the AO u/s.271B of the Income Printed from counselvise.com ITA No.3448/Chny/2025 (AY 2020-21) Kalaiarasan Selvaraj :: 2 :: Tax Act, 1961 (hereinafter referred to as ‘the Act‘) for non-filing of Tax Audit Report (TAR) u/s.44AB of the Act. 3. The brief facts are that the assessee is an individual, who filed his return of income (RoI) on 12.09.2024, pursuant to the notice issued by the AO u/s.148 of the Act for AY 2020-21. And the assessee is noted to have filed RoI along with TAR admitting total income at ₹5,59,460/-. The AO is noted to have accepted the return filed by the assessee by assessment order dated 27.12.2024 passed u/s.147 r.w.s.144B of the Act. Thereafter the AO initiated penalty u/s.271B of the Act for belated filing of TAR. Pursuant to the notice issued for levy of penalty, the assessee, inter alia, pleaded that TAR has been filed along with RoI on 12.09.2024 i.e. well before the assessment order was framed on 27.12.2024. Hence, pleaded that belated filing of TAR should not attract penalty. However, the AO levied penalty u/s.271B of the Act and saddled him with penalty of ₹1.50 lakhs. On appeal, the Ld.CIT(A) has confirmed the same. 4. Aggrieved, the assessee is in appeal before this Tribunal. 5. We have heard both the parties and perused the material available on record. We find that the assessee had belatedly filed the RoI along with TAR for AY 2020-21 on 12.09.2024. Pursuant to notice u/s.148 of the Act, the AO is noted to have passed the Assessment Order on Printed from counselvise.com ITA No.3448/Chny/2025 (AY 2020-21) Kalaiarasan Selvaraj :: 3 :: 27.12.2024 u/s.147 r.w.s.144B of the Act for AY 2020-21, which means the TAR was filed well before the assessment was framed by the AO. Thus, we find that non-filing of TAR within the due date was technical breach; and also take judicial notice of the fact that the due-date of filing of return and the TAR as per Section 44AB of the Act, falls during Covid- 19 period, which period was excluded suo-motto by the Hon’ble Supreme Court exercising powers under Article 142 of the Constitution of India in the case of Re: Cognizance for Extension of Limitation reported in [2022] 441 ITR 722 (SC) from 15.03.2020 to 28.02.2022, for the purpose of computing limitation under all general and special laws which includes Income Tax Act, 1961. It is undisputed that the due-date for filing of TAR falls in the period of exclusion (supra). Thus, we note that in this case, there is reasonable cause for non-levy of penalty as per Section 273B of the Act, which empowers authorities discretion not to levy penalty. Further, non-filing of TAR before the due-date is a technical breach, which delay can’t be attributed to any deliberate omission on the part of the assessee. Hence, the assessee filing TAR only on 12.09.2024 along with the return pursuant to the notice u/s.148 of the Act, and the AO duly accepting the returned income by passing the assessment order on 27.12.2024, reveals that TAR was available with the AO when he framed the assessment order. In such a scenario, the explanation of the assessee that the TAR was belatedly filed due to problems created by Printed from counselvise.com ITA No.3448/Chny/2025 (AY 2020-21) Kalaiarasan Selvaraj :: 4 :: Covid-19 and not due to deliberate omission on the part of the assessee which on the facts of the case as explained by the assessee is found to be reasonable; and therefore, we are of the considered opinion that this is not a fit cases for imposing penalty on the assessee and for such preposition, we rely on the decision of the Hon’ble Madras High Court in the case of P. Senthil Kumar v. CIT reported in (2019) 416 ITR 336 (Mad.)(HC). Hence, we cancel the penalty imposed by the authorities below. 6. In the result, appeal filed by the assessee is allowed. Order pronounced on the 04th day of February, 2026, in Chennai. Sd/- (एस. आर. रघुनाथा) (S.R.RAGHUNATHA) लेखा सद\u0003य/ACCOUNTANT MEMBER Sd/- (एबी टी. वक ) (ABY T. VARKEY) \u0005याियक सद\u0003य/JUDICIAL MEMBER चे ई/Chennai, !दनांक/Dated: 04th February, 2026. TLN आदेश क\u001a \u0017ितिलिप अ$ेिषत/Copy to: 1. अपीलाथ /Appellant 2. \u000e\u000fथ /Respondent 3. आयकरआयु\u0015/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u000eितिनिध/DR 5. गाड फाईल/GF Printed from counselvise.com "