SHAH AND HAHAR IND. PREMISES A-1 CO OP SOCIETY LTD ,MUMBAI V. ITO WARD 20(3)(1), MUMBAI

ITA 5645/MUM/2025

AI Insights

The case involves Shah And Nahar Industrial Premises A-1 Co-op Society Ltd., which appealed against the penalty imposed by the Assessing Officer and confirmed by the CIT(A) for non-compliance with notices under section 142(1) of the Income Tax Act. The society argued that due to administrative changes and ongoing major repairs, they were unable to respond to the notices. The tribunal, after considering the specific circumstances and the administrative changes within the society, decided in favor of the appellant, setting aside the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784847 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2020-2021
• Appeal Filed On: 11-09-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWANIL CHOUDHARY
• Keywords: Set aside
• Section: 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “G”, MUMBAI Before Justice (Retd.) C V Bhadang, Hon’ble President & Shri Prabhash Shankar, Hon’ble Accountant Member ITA No. 5645/Mum/2025 (Assessment Year : 2020-21) Shah And Nahar Industrial Premises A-1 Co-op Society Ltd., 4th Floor, Shah & Nahar Ind. Estate (A-1), Sun Mill Compound, Lower Parel (W), Mumbai 400 013. PAN AAAAS0429E Vs. ITO Ward 20(3)(1), Mumbai. (Appellant) (Respondent) Appellant By : None Respondent By : Shri Swanil Choudhary- Sr AR Date of Hearing : 11.11.2025 Date of Pronouncement: 13.11.2025 O R D E R Per Justice (Retd.) C V Bhadang, President: By this appeal the assessee is challenging the order dated 15.07.2025 passed by National Faceless Appeal Centre (NFAC) (‘CIT(A)’ for short) thereby confirming the imposition of penalty of Rs.40,000/- u/s. 271A(1)(d) of the Income Tax Act, 1961 (‘Act’ for short) by order dated 02.03.2023 by the Assessing Officer. This appeal relates to A.Y. 2020-21. The penalty has been imposed on account of non-compliance of notices issued to the appellant u/s. 142(1) of the Act. 2. None appear for the assessee. We have heard the learned DR. Perused record. Printed from counselvise.com 2 ITA 5645/Mum/2025 Shah And Nahar Industrial Premises A-1 Co-op Society Ltd. 3. The appellant-assessee is a co-operative society registered under Maharashtra Co-operative Society Act, 1960. The appellant was issued notice dated 29.06.2021 u/s. 143(2) of the Act to which the appellant did not file any response. According to the appellant notice was issued only in compliance of statutory requirement. Subsequently, three notices were issued to the appellant on 25.11.2021, 08.02.2022 and 16.02.2022 u/s. 142(1) of the Act. According to the appellant the first notice dated 25.11.2021 was not received by the appellant either by email or by post. So far as the two subsequent notices are concerned, the appellant could not file response on account of the fact that an administrator was appointed in December, 2019 on the appellant- society. Accordingly, the Administrative Board was formed, which had terminated the services of Chief Accountant Shri Sambhaji L Devte on 18.03.2020. The Administrative Board also changed the Chartered Accountants, who were previously handling the Income Tax and GST matters of the Society and appointed Mr. I P Mehta Chartered Accountant to handle the same. It was also contended that on the basis of Structural Audit Report, the society was required to carry out major repairs of the building for which the Administrative Board was in the process of inviting tenders and awarding contracts, which was eventually awarded to M/s. Build Tech India. The contractor was carrying out major repair work of the building. On account of these reasons the appellant could not respond to the subsequent notices dated 08.02.2022 and 16.02.2022 issued u/s. 142(1) of the Act. 4. The Assessing Officer as well as the learned CIT(A) has refused to accept the reasons for non-compliance. The CIT(A) has observed that the explanation is general in nature. In the opinion of the CIT(A) the explanation is unjustified, unwarranted and unsustainable and therefore not acceptable. Printed from counselvise.com 3 ITA 5645/Mum/2025 Shah And Nahar Industrial Premises A-1 Co-op Society Ltd. 6. The learned DR has supported the impugned order. 7. We do not find that the explanation was general in nature. It was specific in so far as appointment of the Administrative Board, discontinuance of the service of the earlier Chief Accountant as well as the repair work of the building, which in our opinion was sufficient reason for the appellant’s failure to respond to the notices u/s. 142(1) of the Act. It is necessary to note that the assessee does not stand to gain by such failure to respond to the notices. In any event, in the given facts and circumstances of the case, we find that the appellant has demonstrated sufficient and justifiable reasons for the non-compliance. The imposition of penalty u/s. 271A(1)(d) of the Act is thus unwarranted. 8. In the result, the appeal is allowed. The impugned order imposing penalty is set aside. Order pronounced in the open court on 13th November,2025. Sd/- Sd/- Sd/- [Prabhash Shankar] [Justice (Retd.) C V Bhadang] ACCOUNTANT MEMBER PRESIDENT Mumbai, Dated : 13th November, 2025. SA Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The PCIT, Mumbai. 4. The CIT 5. The DR, ‘G’ Bench, ITAT, Mumbai BY ORDER //True Copy// (Assistant Registrar) Income Tax Appellate Tribunal, Mumbai Printed from counselvise.com "