2026 (3) TMI 363

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.... appeal: "1. The order u/s 250 of the act dt. 15-09-2025 passed by the commissioner of income tax (Appeals), NFAC, Delhi is erroneous both on facts and in law to the extent prejudicial to the interest of the appellant. 2. The Ld. CIT(A) ought to have considered that the levy of penalty u/s 272A(1)(d) of the act of Rs. 20,000/- by the AO dt. 14.08.2024 is not sustainable as the appellant was prevented by sufficient cause and as such provisions of the sec 273B of the act area clearly applicable. 3. The Ld. CIT(Appeals) failed to appreciate that the appellant's mother, Smt.S.Varalakshmi is suffering from MSA-P since 2018, for which a medical certificate given by consultant Neurologist dt.14-09-2024 of KIMS Hospit....

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....ar 2022-23 on 17.07.2022, declaring a total income of Rs. 3,92,160/-. The assessment of the assessee was completed by the Learned Assessing Officer ("Ld. AO") under section 144 read with section 144B of the Income Tax Act, 1961 ("the Act") on 13.03.2024, assessing the total income of the assessee at Rs. 89,16,809/-. During the course of the assessment proceedings, the assessee failed to comply with the notices issued by the Ld. AO under section 142(1) of the Act dated 28.08.2023 and 07.02.2024. Consequently, the Ld. AO initiated penalty proceedings under section 272A(1)(d) of the Act. During the penalty proceedings also, the assessee did not comply with the notices issued by the Ld. AO. The Ld. AO, therefore, passed a penalty order under se....

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.... and had earned income of Rs. 85,24,649/- from such activities. It was contended that when the assessee was actively involved in online gaming on a continuous basis, the plea that he could not comply with statutory notices due to the medical condition of his mother is not acceptable. The Ld. DR, therefore, supported the orders of the lower authorities and prayed for confirmation of the penalty. 7. In rejoinder, the Ld. AR further invited our attention to page no.15 of the order of the Ld. CIT(A), wherein the grounds raised by the assessee in the quantum appeal have been reproduced. It was pointed out that the assessee himself had taken a specific ground (Ground No.13) stating that he was not involved in online gaming and that the gaming ....

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....ncompliance of which has resulted in levy of penalty, were issued on 28.08.2023 and 07.02.2024, much prior to the date of the medical certificate. The assessee has not brought on record any contemporaneous medical evidence to demonstrate that during the relevant period of non-compliance, his mother's medical condition was such as to prevent him from responding to statutory notices. Therefore, in our considered view, the assessee has failed to establish a reasonable cause within the meaning of section 273B of the Act. 10. We also find merit in the contention of the Ld. DR that during the year under consideration, the assessee was actively engaged in online gaming activities and had earned substantial income therefrom. When the assessee wa....