TaxTMI 
TaxTMI 
2026 (9) TMI 586
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.... Verification Unit, the reply did not explain any reasonable cause for the non-compliance by the assessee in response to earlier notices issued under section 142(1) of the Act. The Assessing Officer held that the assessee had deliberately failed to comply with the statutory notices without any sufficient cause and levied penalty under section 271(1)(b) of the Act amounting to Rs. 10,000 for each of the two defaults, aggregating to Rs. 20,000. 3. Before the Commissioner of Income-tax (Appeals), the assessee challenged the penalty primarily on legal as well as factual grounds. The assessee contended that the reassessment order had already been challenged before the CIT(A) by filing Form No. 35 on 06.01.2022 and, therefore, in view of section 275(1)(a), the Assessing Officer ought not to have passed the penalty order while the quantum appeal was pending. On merits, the assessee explained that the assessee had originally been allotted PAN AABFH1723L with the incorrect status of a partnership firm instead of a company, making electronic filing of its return impossible after e-filing became mandatory. According to the assessee, it was compelled to obtain a fresh PAN Viz. AABCH7678H, u....
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.... Both the Assessing Officer in the remand proceedings and the learned CIT(A) have accepted the fact that there was a double allotment of PAN and the original PAN gave an incorrect status. Thus, the basic explanation furnished by the assessee regarding the existence of two PANs is not in dispute. 8. The learned CIT(A.), however upheld the penalty u/s. 271(1)(b) of the Act. In our considered opinion, this finding cannot be seen in isolation. It is important to note that the very additions made in the reassessment proceedings, which formed the background for initiation of the present penalty proceedings, have subsequently been deleted by the Coordinate Bench of the Tribunal in the assessee's own case for the same assessment year in ITA No. 4461/Mum/2025 vide order dated 14.08.2025. After examining Form 26AS, ledger accounts, audited financial statements and other documentary evidence, the Coordinate Bench held that the contract receipts and service charges against the old PAN had already been accounted for and offered to tax under the correct PAN. The Tribunal further held that making a separate addition on the basis of the old PAN would result in double taxation, which is impe....
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....rnover, contract receipts and credit card expenditure were reflected against the assessee's old PAN. Since the assessee did not make compliance during the reassessment proceedings, the Assessing Officer completed the assessment under section 144 of the Act and assessed the total income at Rs. 21,40,940/-. The Assessing Officer initiated penalty proceedings under section 271(1)(c) of the Act and then levied penalty of Rs. 6,61,550/-, being 100% of the tax sought to be evaded. 14. In appeal, the learned CIT(A) dismissed the appeal of the assessee. The learned CIT(A) observed that although the assessee's contention regarding allotment of two PANs and the status mismatch was factually correct, the assessee had continued to use the old PAN with third parties and had failed to establish that the receipts reflected under the old PAN had already been offered to tax under the new PAN. Accordingly, the CIT(A) held that the assessee had concealed its income and the Assessing Officer was justified in levying penalty under section 271(1)(c) of the Act. Accordingly, the penalty of Rs. 6,61,550/- was confirmed. 15. The assessee is in appeal before us against the order passed by CIT(....
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.... and contract receipts. Since the turnover of the assessee exceeded the monetary threshold prescribed under section 44AB of the Act, the Assessing Officer held that the assessee was required to get its accounts audited and furnish the tax audit report before the prescribed due date. Since the assessee did not file tax audit report for the PAN under which the reassessment proceedings were initiated, the Assessing Officer issued show-cause notices under section 271B of the Act. The Assessing Officer levied penalty of Rs. 1,11,165/- under section 271B of the Act. 22. The CIT(Appeals) held that since the additions had also been sustained by the first appellate authority, the Assessing Officer was justified in holding that the assessee had failed to obtain and furnish the tax audit report as required under section 44AB of the Act and accordingly confirmed the penalty levied under section 271B of the Act. 23. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. 24. The issue for our consideration is whether the penalty levied under section 271B of the Act for failure furnish tax audit report under section 44AB of the....
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....n under the PAN against which the reassessment proceedings were initiated. The Assessing Officer held that since the assessee had failed to comply with the requirement of filing the return of income, the Assessing Officer imposed penalty under section 271F of the Act. 31. In appeal, the learned CIT(A) upheld the levy of penalty. The learned CIT(A) accepted that there was a double allotment of PAN and the original PAN had been allotted in an incorrect status. However, CIT(Appeals) held that the assessee had continued to use the old PAN with third parties and had failed to prove that the income duly reflected under the old PAN had already been disclosed under the correct PAN. The learned CIT(A), therefore, held that the Assessing Officer was justified in levying penalty under section 271F of the Act and dismissed the appeal filed by the assessee. 32. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. 33. We find that the penalty under section 271F of the Act has been levied solely on the premise that the assessee had failed to file its return of income under PAN AABFH1723L. However, the undisputed factual posit....