UNIQUE INSURANCE SERVICES ,LUDHIANA V. ITO WARD 6(1), LUDHIANA, PUNJAB

ITA 1148/CHANDI/2025

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The case involves M/s Unique Insurance Company appealing against the penalty levied under section 270A of the Income Tax Act for the Assessment Years 2018-19 to 2020-21. The penalties were imposed due to under-reporting of income as the assessee did not file regular returns but declared income upon receiving TDS on insurance commissions. The firm argued that the managing partner's health issues and absence from India prevented timely filing of returns, and that the show-cause notice was vague. The Income Tax Officer (ITO) and the Commissioner of Income Tax (Appeals) upheld the penalties, leading to the current appeal before the Income Tax Appellate Tribunal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826507 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2019-2020
• Appeal Filed On: 06-09-2025
• Laws Referred To: Section 270A, Section 270AA, Section 139(1)
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: PARIKSHIT AGGARWAL LD
• Keywords: Reasonable cause; TDS

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, CHANDIGARH PHYSICAL HEARING HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM 1. आयकर अपील सं. / ITA No.1147/CHANDI/2025 (िनधाŊरण वषŊ / Assessment Year: 2018-19) & 2. आयकर अपील सं. / ITA No.1148/CHANDI/2025 (िनधाŊरण वषŊ / Assessment Year: 2019-20) & 3. आयकर अपील सं. / ITA No.1149/CHANDI/2025 (िनधाŊरण वषŊ / Assessment Year: 2020-21) M/s Unique Insurance Company B-XXVI, 759/1 Near Punjabi Bhawan, Bharat Nagar Chowk, Ludhiana Punjab - 141001 बनाम/ Vs. ITO, Ward-6(1) Aaykar Bhawan, Ludhiana (Punjab) - 142029 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. AABFU-6174-G (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Sh. Parikshit Aggarwal (CA) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 06-01-2026 घोषणाकीतारीख /Date of Pronouncement : 08-01-2026 आदेश / O R D E R 1. Aforesaid appeals by assessee for Assessment Years (AY) 2018-19 to 2020-21 have identical facts and issues i.e., confirmation of levy of penalty u/s 270A. The facts leading to levy of penalty on the assessee are identical. First, I take up appeal for AY 2018-19 which Printed from counselvise.com 2 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 06-08-2025 confirming impugned penalty as levied by Ld. AO u/s 270A for Rs.5,46,590/- vide order dated 25-09-2024. 2. The Ld. AR advance arguments to contend that levy of penalty is not automatic. The partner of the firm was not present in India due to health issues and the firm did not undertake any new insurance business during the year. It received renewal commission only. It has further been contended that the show-cause notice was vague which did not specify the exact limb which was applicable to the case of the assessee and therefore, the penalty was bad-in-law. The Ld. AR also referred to the provisions of Sec.270AA granting immunity from imposition of penalty. The Ld. Sr. DR justified penalty in terms of statutory provisions of Sec.270A(2)(b) which mandate levy of penalty in cases like the present case. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 3. It emerges that the assessee firm did not file regular return of income. However, it received insurance commission for Rs.65.38 Lacs on which TDS was deducted by the payer. Accordingly, the case was reopened and the assessee filed return of income declaring income of Rs.35.37 Lacs which stood accepted by Ld. AO while framing the assessment. However, since the assessee did not file regular return of income u/s 139(1), Ld. AO proposed penalty u/s 270A for under- reporting of income and show-caused the assessee. Though the assessee opposed levy of penalty on the ground that the return of Printed from counselvise.com 3 income could not be filed since managing partner of the firm faced serious health problems and was getting treatment in Canada during relevant time, Ld. AO rejected the contentions and levy impugned penalty of Rs.5,46,5490/-. The Ld., CIT(A) confirmed the same against which the assessee is in further appeal before us. 4. I find that the assessee could not prove reasonable cause for not filing its return of income. The assessee is a firm and the fact that there was other partner to manage the affairs of the firm could also not be ruled out. The assessee could not substantiate the reasonable cause with cogent evidences. However, considering the legal plea of Ld. AR as well as the contention that the return could not be filed due to adverse medical conditions, I restore the appeal back to the file of Ld. CIT(A) for fresh adjudication in the light of these arguments. The assessee is directed to plead and prove its case forthwith including establishing the reasonable cause for non-filing of regular return of income. All the issues are kept open. 5. Admittedly, the facts in AYs 2019-20 and 2020-21 are pari- materia the same. Therefore my above adjudication would mutatis mutandis apply to both these appeals also. 6. All the appeals stand allowed for statistical purposes. Order pronounced on 08th January, 2026. -Sd- (MANOJ KUMAR AGGARWAL) ACCOUNTANT MEMBER Dated: 08-01-2026 Printed from counselvise.com 4 आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "