I answered the section 142(1) notice late — after the show-cause notice — but the Assessing Officer used my reply and completed a section 143(3) assessment. Can he still levy Rs 10,000 under section 272A(1)(d)?
Not on this reasoning. Where the assessee complied, though belatedly, well before the assessment order was framed, and the Assessing Officer considered the reply and the documents in framing a section 143(3) assessment, the Allahabad Bench held the case does not fall in the category of non-compliance at all, and deleted the penalty. It added, independently, that in the first year of the shift from physical to electronic proceedings a delay caused by the change in the mode of communication is bona fide and not deliberate.
Decided by the ITAT (Shri Vijay Pal Rao, Judicial Member (SMC Bench)) on 2022-09-13, reported as ITA No. 20/ALLD/2022 (ITAT Allahabad SMC Bench); no law-report citation traced. It bears on section 272A(1)(d), section 142(1), section 143(3), section 274 of the Income Tax Act 1961, in Penalty, Assessment & Scrutiny and Faceless Assessment & Appeals matters.
This is the authority for the two arguments practitioners most often need: that late compliance which the Assessing Officer actually used is not non-compliance, and that the migration to e-assessment is itself a bona fide cause. The Tribunal also fixed on a detail worth borrowing — the notice of 18-11-2019 gave only four days to comply, and the Tribunal said so in terms before turning to the merits. The limit is that the reasoning turns on the reply being on record and considered in the assessment: where the assessment went ex parte under section 144, the argument is materially weaker, and the Chennai Bench sustained the penalty in Balakumar Anusia where nothing was filed at all. The digital-transition limb is also time-bound; it will not carry a default in a recent year.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
Read aloud by your device. Press again to stop.
The assessee, a partnership firm, filed its return for assessment year 2017-18 on 22-10-2017 declaring Rs 44,680. System-generated notices under section 142(1) were served on its email on 08-07-2019 (compliance by 15-07-2019) and 17-07-2019 (compliance by 24-07-2019); an adjournment request against the second was refused and the assessee filed an online reply on 29-07-2019 and sent documents by post. Further queries were raised by a notice under section 142(1) issued on 18-11-2019 fixing compliance by 22-11-2019 — four days. No reply was filed by that date, and on 05-12-2019 the Assessing Officer issued a show-cause notice under section 274 read with section 272A(1)(d) fixing 09-12-2019. The assessee then filed the reply to the queries with documents on 20-12-2019, and the Assessing Officer framed the assessment under section 143(3) on 28-12-2019 after considering them. He nevertheless levied a penalty of Rs 10,000 by order dated 10-01-2022. The CIT(A)/NFAC dismissed the appeal by order dated 15-06-2022.
The appeal of the assessee was allowed and the penalty under section 272A(1)(d) was deleted. Where the assessee finally complied with the notice and the Assessing Officer duly considered the reply and the documents while framing the assessment, the case does not fall in the category of non-compliance at all and the subsequent penalty is not justified; and in any event, in the year of change from physical to electronic assessment proceedings a delay in compliance caused by the change in the mode of communication is a bona fide reason and not deliberate (paragraph 8).
The Tribunal set out the Assessing Officer's own recital of the sequence of notices and replies and observed that only four days had been given to comply with the notice of 18-11-2019, after which the penalty show-cause notice was issued on 05-12-2019 and the reply followed. It held that the assessee had complied with the notice of 18-11-2019, albeit belatedly, and had also replied to the earlier letter of 18-07-2019; that the compliance was made well before both the assessment order and the penalty order; and that since the Assessing Officer framed the section 143(3) assessment after considering that reply and those documents, it was not a case of non-compliance but of belated compliance. It then added the independent ground of the change in the mode of assessment proceedings.
Once the assessee has made the compliance though after some delay but it was well before the assessment order was framed and the penalty order dated 10.1.2022.
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppNot on this reasoning. Where the assessee complied, though belatedly, well before the assessment order was framed, and the Assessing Officer considered the reply and the documents in framing a section 143(3) assessment, the Allahabad Bench held the case does not fall in the category of non-compliance at all, and deleted the penalty. It added, independently, that in the first year of the shift from physical to electronic proceedings a delay caused by the change in the mode of communication is bona fide and not deliberate. This was decided by the ITAT (Shri Vijay Pal Rao, Judicial Member (SMC Bench)) and bears on section 272A(1)(d), section 142(1), section 143(3), section 274 of the Income Tax Act 1961. It is reported as ITA No. 20/ALLD/2022 (ITAT Allahabad SMC Bench); no law-report citation traced. This is the authority for the two arguments practitioners most often need: that late compliance which the Assessing Officer actually used is not non-compliance, and that the migration to e-assessment is itself a bona fide cause. The Tribunal also fixed on a detail worth borrowing — the notice of 18-11-2019 gave only four days to comply, and the Tribunal said so in terms before turning to the merits. The limit is that the reasoning turns on the reply being on record and considered in the assessment: where the assessment went ex parte under section 144, the argument is materially weaker, and the Chennai Bench sustained the penalty in Balakumar Anusia where nothing was filed at all. The digital-transition limb is also time-bound; it will not carry a default in a recent year. If it applies to you, the first step is this: Establish from the assessment order itself that your reply and documents were considered — here the Assessing Officer had recorded the whole sequence of notices and replies at his own paragraphs 2 and 5.2, and that recital is what defeated the penalty.
The assessee, a partnership firm, filed its return for assessment year 2017-18 on 22-10-2017 declaring Rs 44,680. System-generated notices under section 142(1) were served on its email on 08-07-2019 (compliance by 15-07-2019) and 17-07-2019 (compliance by 24-07-2019); an adjournment request against the second was refused and the assessee filed an online reply on 29-07-2019 and sent documents by post. Further queries were raised by a notice under section 142(1) issued on 18-11-2019 fixing compliance by 22-11-2019 — four days. No reply was filed by that date, and on 05-12-2019 the Assessing Officer issued a show-cause notice under section 274 read with section 272A(1)(d) fixing 09-12-2019. The assessee then filed the reply to the queries with documents on 20-12-2019, and the Assessing Officer framed the assessment under section 143(3) on 28-12-2019 after considering them. He nevertheless levied a penalty of Rs 10,000 by order dated 10-01-2022. The CIT(A)/NFAC dismissed the appeal by order dated 15-06-2022. The matter was decided on 2022-09-13 by the ITAT (Shri Vijay Pal Rao, Judicial Member (SMC Bench)). On those facts the ITAT held as follows. The appeal of the assessee was allowed and the penalty under section 272A(1)(d) was deleted. Where the assessee finally complied with the notice and the Assessing Officer duly considered the reply and the documents while framing the assessment, the case does not fall in the category of non-compliance at all and the subsequent penalty is not justified; and in any event, in the year of change from physical to electronic assessment proceedings a delay in compliance caused by the change in the mode of communication is a bona fide reason and not deliberate (paragraph 8).
The Tribunal set out the Assessing Officer's own recital of the sequence of notices and replies and observed that only four days had been given to comply with the notice of 18-11-2019, after which the penalty show-cause notice was issued on 05-12-2019 and the reply followed. It held that the assessee had complied with the notice of 18-11-2019, albeit belatedly, and had also replied to the earlier letter of 18-07-2019; that the compliance was made well before both the assessment order and the penalty order; and that since the Assessing Officer framed the section 143(3) assessment after considering that reply and those documents, it was not a case of non-compliance but of belated compliance. It then added the independent ground of the change in the mode of assessment proceedings. In the words reproduced by the source cited on this page: "Once the assessee has made the compliance though after some delay but it was well before the assessment order was framed and the penalty order dated 10.1.2022."
It was decided by the ITAT on 2022-09-13 and is reported as ITA No. 20/ALLD/2022 (ITAT Allahabad SMC Bench); no law-report citation traced. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 272A(1)(d), section 142(1), section 143(3), section 274, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal of the assessee was allowed and the penalty under section 272A(1)(d) was deleted. Where the assessee finally complied with the notice and the Assessing Officer duly considered the reply and the documents while framing the assessment, the case does not fall in the category of non-compliance at all and the subsequent penalty is not justified; and in any event, in the year of change from physical to electronic assessment proceedings a delay in compliance caused by the change in the mode of communication is a bona fide reason and not deliberate (paragraph 8). It arises in Penalty, Assessment & Scrutiny and Faceless Assessment & Appeals matters, on section 272A(1)(d), section 142(1), section 143(3), section 274 of the Income Tax Act 1961, and was decided by Shri Vijay Pal Rao, Judicial Member (SMC Bench). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Compute the compliance window the notice actually allowed and state it: four days between 18-11-2019 and 22-11-2019 was a fact the Tribunal recorded before finding the delay excusable. Where the assessment was completed under section 143(3) rather than section 144, say so expressly — it is the clearest available evidence that the subsequent compliance was treated as good compliance. Take the point that no satisfaction for initiating the penalty was recorded in the assessment order if that is so; it was argued here, though the Tribunal decided the appeal without needing it.
Validity check could not be completed. Validity check could not be completed. No later treatment was searched for or found. The order has since been relied on in argument before other Benches — it was quoted at length in the written submissions reproduced in Amit Jain v DCIT (ITAT Jaipur, 24 June 2025) — but this pass did not locate any decision approving or doubting it. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order carries obvious typographical slips that should not mislead: at paragraph 4 the notice under section 142(1) is dated '18th November, 2009' where the rest of the order gives 18-11-2019, and at paragraphs 5 and 7 the reply is said to have been filed on '20th December, 2022' where paragraph 5.2 of the Assessing Officer's order, reproduced in the judgment, dates the reply 20th December, 2019 and the assessment was framed on 28-12-2019. Read 2019 throughout. The order runs to nine numbered paragraphs; the block quoted at paragraph 6 is the Assessing Officer's own paragraph 2 and the block at paragraph 7 is his paragraph 5.2, neither of which is the Tribunal speaking. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal of the assessee was allowed and the penalty under section 272A(1)(d) was deleted. Where the assessee finally complied with the notice and the Assessing Officer duly considered the reply and the documents while framing the assessment, the case does not fall in the category of non-compliance at all and the subsequent penalty is not justified; and in any event, in the year of change from physical to electronic assessment proceedings a delay in compliance caused by the change in the mode of communication is a bona fide reason and not deliberate (paragraph 8).
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
We charge fees for our public utility work. Does that cost us charitable status under s.2(15)?
My return was only processed under 143(1). Does that stop the department reopening it later?
No s.143(2) notice was issued at all. Does s.292BB save the assessment?
The penalty notice does not say whether I concealed income or filed inaccurate particulars. Does that matter?