LATE NIMMATOORI RAJABABU,HYDERABAD V. ACIT., CENTRAL CIRCLE 2(4), HYDERABAD

ITA 595/HYD/2025

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The case revolves around a penalty imposed on the assessee, Late Nimmatoori Raja Babu, for non-compliance with a summons issued under section 131 of the Income Tax Act, 1961, during the assessment proceedings for the year 2017-2018. The Assessing Officer initiated penalty proceedings after the assessee failed to respond to multiple notices and the summons. The assessee, citing prolonged sickness, did not attend the summons, which led to a penalty of Rs.10,000. The assessee appealed against this penalty, which was sustained by the CIT(A). The Tribunal, however, found merit in the assessee's arguments and the circumstances of prolonged illness, leading to the allowance of the appeal and deletion of the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716502 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Appeal Filed On: 03-04-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POSU BABU ALLI
• Assessee Lawyers: P. MURALI MOHAN RAO
• Keywords: Search and seizure
• Section: 153A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA.No.595/Hyd./2025 Assessment Year 2017-2018 Late Nimmatoori Raja Babu, Hyderabad. PIN – 500 013. PAN ACSPN1662R vs. The ACIT, Central Circle-2(4), Hyderabad. (Appellant) (Respondent) For Assessee : CA, P. Murali Mohan Rao For Revenue : Sri Posu Babu Alli, Sr. AR Date of Hearing : 18.08.2025 Date of Pronouncement : 20.08.2025 ORDER PER MANJUNATHA, G. This appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-12, Hyderabad, relating to assessment year 2017- 2018. 2. Briefly stated facts of the case are that, a search and seizure operation u/sec.132 of the Income Tax Act, 1961 [in short “the Act”] conducted in the case of M/s. Printed from counselvise.com 2 ITA.No.595/Hyd./2025 Aurora Educational Society groups on 23.03.2018. During the course of assessment proceedings u/sec.143(3) r.w.s. 153A of the Act for the assessment year 2017-18, the Assessing Officer issued several notices u/sec.142(1) of the Act, requesting the assessee to produce the books of accounts. However, the assessee did not comply with the said notices. Finally, the Assessing Officer issued summons u/sec.131 of the Act to the assessee on 25.10.2019. However, the assessee neither appeared on the date of hearing nor produced any books of account. Therefore, the learned Assessing Officer i.e., ACIT, Central Circle-2(4), Hyderabad, has sent a proposal for imposition of penalty u/sec.272A(1)(c) of the I.T. Act, 1961, vide letter dated 26.12.2019 and for non-attending the summons u/sec.131 of the Act, penalty proceeding u/s. 272A(1)(c) of the I.T. Act, 1961 was initiated by the Assessing Officer and a notice u/sec.274 r.w.s. 272A(1)(c) of the I.T Act 1961, was issued to the assessee on 13.01.2021 Printed from counselvise.com 3 ITA.No.595/Hyd./2025 and posted the case for hearing on 25.01.2021. In response, the assessee filed reply dated 19.02.2021, contending, inter alia, that, because of prolonged sickness, the assessee could not attend the summons on the said date. However, the Assessing Officer has not accepted the explanation furnished by the assessee, in absence of documentary evidences like, medical prescriptions/hospital bills produced in support of the claim. Therefore, the Assessing Officer concluded that, the non-compliance to summons is without any valid reason and accordingly levied penalty of Rs.10,000/- for non-attending the summons u/sec.131 of the Act u/sec.272A(1)(c) of the Income Tax Act, 1961 vide order dated 25.06.2021. 3. On being aggrieved, the assessee preferred appeal before the learned CIT(A) and filed his submissions. The learned CIT(A) after considering the submissions of the assessee, sustained the penalty levied by the Assessing Officer. Printed from counselvise.com 4 ITA.No.595/Hyd./2025 4. Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal. 5. CA, P. Murali Mohan Rao, Learned Counsel for the Assessee submitted that, the assessee has explained the reasons for not responding to the summons issued u/sec.131 of the Act dated 31.10.2019. He submitted that, the assessee could not attend on the date of hearing of the case before the Assessing Officer due to his prolonged sickness. However, subsequently, the assessee had furnished details and the Assessing Officer has completed the assessment u/sec.143(3) of the Income Tax Act, 1961. Learned Counsel for the Assessee submitted that, the assessee has furnished the death certificate of the assessee and argued that, after prolonged illness the assessee finally demised on 05.06.2023. He submitted that, the non-appearance of the assessee before the Assessing Officer in response to summons issued u/sec.131 of the Act is out of the above bonafide Printed from counselvise.com 5 ITA.No.595/Hyd./2025 reasons and, therefore, the Assessing Officer ought not to have levied the penalty. Further, the learned CIT(A) also without considering the submissions of the assessee, has simply sustained the penalty levied by the Assessing Officer. He, therefore, submitted that, the penalty levied by the Assessing Officer should be deleted. 6. Sri Posu Babu Alli, Sr. AR for the Revenue, on the other hand, relied on the order of the learned CIT(A). He submitted that, sufficient opportunities were provided to the assessee by the Assessing Officer. However, the assessee did not respond to any of the notices and summons. Therefore, the Assessing Officer has rightly levied the penalty as per the provisions of the Income Tax Act, 1961. He submitted that, even before the learned CIT(A) also during the course of appellate proceedings, the assessee failed to substantiate his case, except reiterating the submissions made before the Assessing Officer. Printed from counselvise.com 6 ITA.No.595/Hyd./2025 Therefore, the learned CIT(A) has rightly sustained the penalty levied by the Assessing Officer. He accordingly submitted that, the Order of the learned CIT(A) should be upheld. 7. We have heard both the parties, perused the material on record and the orders of the authorities below. We find that, the assessee has explained the reasons for not responding to the summons issued u/sec.131 of the Income Tax Act, 1961 dated 31.10.2019 by the Assessing Officer and as per the assessee, due to his prolonged sickness, he could not attend on the date when the Assessing Officer issued summons. However, subsequently, the assessee has furnished details and assessment has been completed u/sec.143(3) of the Income Tax Act, 1961. Further, we find that, Learned Counsel for the Assessee has furnished the death certificate of the assessee and argued that, after prolonged illness the assessee finally demised on 05.06.2023. In our considered view, the Printed from counselvise.com 7 ITA.No.595/Hyd./2025 reasons given by the assessee for not responding to the summons u/sec.131 of the Act comes under bonafide cause as provided u/sec.273B of the Income Tax Act, 1961 and, therefore, the Assessing Officer ought not to have levied penalty for non-compliance to the summons, even though, he has completed the assessment proceedings u/sec.143(3) of the Income Tax Act, 1961, after considering the relevant submissions of the assessee. The learned CIT(A) without considering the relevant facts, has simply sustained the penalty levied by the Assessing Officer u/sec.272A(1)(c) of the Income Tax Act, 1961. Thus, we set-aside the order of the learned CIT(A) and direct the Assessing Officer to delete the penalty of Rs.10,000/- levied u/sec.272A(1)(c) of the Income Tax Act, 1961. 8. In the result, appeal of the assessee is allowed. Printed from counselvise.com 8 ITA.No.595/Hyd./2025 Order pronounced in the open Court on 20.08.2025. Sd/- Sd/- [RAVISH SOOD] [MANJUNATHA G] JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 20th August, 2025 VBP Copy to 1. Late Nimmatoori Raja Babu, Hyderabad – 500 013. C/o. P. Murali & Co. Chartered Accountants, 6-3-655/1/3, Somajiguda, Hyderabad - 500 082. 2. The ACIT, Central Circle-2(4), Hyderabad. 3. The CIT(A)-12, 6th Floor, Aaykar Bhavan, Basheerbagh, Hyderabad – 500 004. 4. The Pr. CIT (Central), Hyderabad. 5. The DR ITAT “A” Bench, Hyderabad. 6. Guard File. //By Order// //True Copy// Printed from counselvise.com "