SAVITHA GAS AGENCIES,POONAMALLEE V. NON CORP. WARD 8(2) CHE, CHENNAI

ITA 3007/CHNY/2025

AI Insights

The case involves Savitha Gas Agency, which faced penalty proceedings under section 271B of the Income Tax Act, 1961, for not filing a tax audit report within the prescribed time due to the death of one of its partners. The Assessing Officer (AO) levied a penalty of Rs. 1,50,000, which was contested by the assessee. The CIT(A) dismissed the appeal due to a significant delay in filing, which the Tribunal found justifiable given the circumstances. The Tribunal's decision to remit the case back to the CIT(A) was based on the principles of natural justice, providing the assessee another opportunity to present its case.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827708 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Appeal Filed On: 29-10-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARV SREENIVASAN
• Assessee Lawyers: J. SARAVANAN
• Keywords: Condonation of delay; Set aside; Principle of natural justice

Judgement Text

" आयकर अपील य अ धकरण, ‘डी’ \u000fयायपीठ, चे\u000fनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI \u0016ी मनु क ुमार ग\u001aर, \u000fया\u001bयक सद य एवं \u0016ी एस. आर. रघुनाथा, लेखा सद य क े सम% BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपीलसं./ITA No.3007/CHNY/2025 \u001bनधा&रण वष& / Assessment Year: 2017-18 Savitha Gas Agency, 92, Trunk Road, Poonamallee, Tiruvallur – 600 056. vs. The Income Tax Officer, Non-Corp Ward-8(2), Chennai. [PAN: AALFS-4834-K] (अपीलाथ(/Appellant) ()*यथ(/Respondent) अपीलाथ( क+ ओर से/ Appellant by : Shri. J. Saravanan, Advocate )*यथ( क+ ओर से /Respondent by : Shri. ARV Sreenivasan, CIT सुनवाई क+ तार ख/Date of Hearing : 16.12.2025 घोषणा क+ तार ख /Date of Pronouncement : 06.01.2026 आदेश / O R D E R PER S.R.RAGHUNATHA, AM: This appeal by the assessee is arising out of the order dated 14.08.2025, passed by the Learned Commissioner of Income Tax (Appeal), NFAC, Delhi (in short “ld.CIT(A)”) for the assessment year (A.Y) 2017-18 against the order u/s.271B of the Income Tax Act, 1961 (hereinafter the ‘Act’) passed by the AO dated 16.03.2022. 2. Brief facts of the case are that the assessee is an Agency, engaged in the business of Gas Agency (Hindustan Petroleum) and has filed its return of income on 02.03.2018 for A.Y.2017-18, declaring total income of Rs.2,85,970/-. Subsequently, the case was selected for scrutiny under CASS to examine the issue of cash deposit during the demonetization period. During the assessment proceedings the AO found that the assessee had not filed tax audit report, though the assessee’s turnover limit was Rs.8.96 Crores for the A.Y.2017-18. Later, the assessee furnished the tax audit report u/s.44AB Printed from counselvise.com 2 ITA No.3007/Chny/2025 of the Act on 02.03.2018 which was beyond the due date specified u/s.44AB of the Act. The AO concluded the assessment by accepting the return of income, however the AO initiated penalty proceedings u/s.271B of the Act. During the penalty proceedings the assessee stated that one of the partners expired on 25.12.2016 and hence the reconstitution of the firm took place. Therefore, the assessee could not file the return as well as the tax audit report within the prescribed due date. However, the AO was not convinced and levied penalty of Rs.1,50,000/- (being lesser of one half percent of turnover being Rs.4,48,064/- of Rs.8,96,12,974/- or Rs.1,50,000/-) and concluded the penalty proceedings by passing penalty order dated 16.03.2022 u/s.271B of the Act. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC, Delhi on 04.05.2023 with a delay in filing the appeal. 4. At the outset, we observed that the ld.CIT(A) dismissed the appeal filed by the assessee in liminie due to delay in filing the appeal by 384 days. Aggrieved by the impugned order of the Ld.CIT(A), the assessee is in appeal before us. 5. The ld.AR submitted that the ld.CIT(A) has not considered the reason for the death of the key partner and its cascading effect caused delay in filing the audit report in time. Further, the ld.AR submitted that the ld.CIT(A) has not considered the audit report filed on 02.03.2018, which was much before the completion of assessment u/s.143(3) of the Act dated 19.12.2019. Therefore, ld.AR prayed for one more opportunity to be provided to the assessee to represent his case before the ld.CIT(A) in the interest of natural justice. Further, the ld.AR assured the bench that he will undertake to represent on behalf of the assessee before the ld.CIT(A), in case one more opportunity is provided. 6. Per contra, the ld.DR submitted that the appeal was to be filed before the ld.CIT(A) by the assessee within 30 days of the service, but the assessee has filed an appeal with delay of more than 384 days. The assessee has been negligent in filing an appeal within the time limit provided and hence prayed for confirming the order of the ld.CIT(A). 7. We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the Assessing Officer has levied penalty for non-filing of tax audit report within the time prescribed u/s.44AB of the Printed from counselvise.com 3 ITA No.3007/Chny/2025 Act. On appeal the ld.CIT(A) has dismissed the same in liminie without considering the reasons for condonation of delay in filing the appeal by 384 days. We are satisfied that the assessee had a sufficient reasons for delay in filing the appeal before the ld.CIT(A) and hence we are condoning the same. 8. Therefore, in the present facts and circumstances of the case and to meet the ends of justice, we deem it fit to provide one more opportunity for the assessee. Therefore, we condone the delay in filing the appeal before ld.CIT(A) as the assessee had filed the condonation of delay in his form 35 itself and hence we set aside the order of the ld.CIT(A) and remit the matter back to the file to ld.CIT(A) to adjudicate the matter afresh in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so. 9. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 06th January, 2026 at Chennai. Sd/- Sd/- (मनु क ुमार ग\u001aर) (MANU KUMAR GIRI) \u000fया\u001bयक सद य/Judicial Member (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखा सद य/Accountant Member चे\u000fनई Chennai: /दनांक Dated : 06th January, 2026 sp आदेश क\u0006 \u0007\bत ल प अ\u000fे षत/Copy to: 1. अपीलाथ(/Appellant 2. )*यथ(/Respondent 3.आयकर आयु0त/CIT– Chennai/Coimbatore/Madurai/Salem 4. 1वभागीय )\u001bत\u001bन ध/DR 5. गाड& फाईल/GF Printed from counselvise.com "