No Penalty u/s 272A(1)(d) if AO Accepted Compliance in Section 143(3) Assessment | ITAT

Case Details: Lila Lila Chayal vs. Deputy Commissioner of Income-tax - [2026] 186 taxmann.com 227 (Jodhpur-Trib.)

Judiciary and Counsel Details

• Sudhir Pareek, Judicial Member & Dr Mitha Lal Meena, Accountant Member
• Rajendra Jain, Adv. for the Appellant.
• Smt. Swapnil Parihar, JCIT (Virtual) for the Respondent.

Facts of the Case

The assessee, an individual, filed its return of income for the relevant assessment year, declaring income from agriculture as well as income from other sources. During the assessment proceedings, the Assessing Officer (AO) issued a notice under section 142(1) to furnish details and information. However, the assessee failed to comply with the notice.

Subsequently, the assessee furnished a detailed reply, supported by documentary evidence, during the assessment proceedings. After considering the submissions, the AO accepted the assessee’s disclosed income and passed the assessment order under section 143(3).

The AO also issued a penalty notice for non-compliance with the notice issued under section 142(1) and levied a penalty of Rs. 10,000 under section 272A(1)(d). Aggrieved by the order, the assessee filed an appeal before the CIT(A), which confirmed the penalty.

The matter then reached the Jodhpur Tribunal.

ITAT Held

The Tribunal held that the assessee furnished a detailed reply with supporting documentary evidence during the assessment proceedings. After considering the submissions, the AO accepted the assessee’s disclosed income and passed the assessment order under section 143(3).

Thus, it is evident from the assessment order that the assessee made sufficient compliance with the notices issued by the AO, culminating in the acceptance of the returned income by the AO. In the Tribunal’s opinion, no penalty under section 272A(1)(d) could be levied when the assessment order was completed under section 143(3).

The AO is deemed to have condoned the absence of the assessee or his Authorised Representative on earlier occasions by subsequently accepting the details furnished by the assessee, and the assessment was completed under section 143(3) by accepting the returned income.

List of Cases Reviewed

• Ramabhai Kanjibhai Patel v. DCIT IT Appeal No. 106 to 110 (SRT) of 2023, dated 11-05-2023 (para 9) followed

List of Cases Referred to

• Rambhai Kanjibhai Patel v. DCIT [IT Appeal No. 106 to 110 (SRT) of 2023, dated 11-05-2023] (para 9).