The Assessing Officer has levied Rs 30,000 under section 272A(1)(d) — Rs 10,000 for each of three notices I did not answer. Can he multiply the penalty like that, and what can I actually get reduced?
Yes, the section provides a penalty of Rs 10,000 per default and the Assessing Officer may levy one for each unanswered notice; the Surat Bench said so in terms. But section 273B is not all-or-nothing on the facts: finding that reasonable cause existed for some of the defaults and not for others, the Tribunal restricted the total from Rs 30,000 to Rs 10,000.
Decided by the ITAT (Shri Sanjay Garg, Judicial Member and Shri Bijayananda Pruseth, Accountant Member) on 2025-12-03, reported as ITA Nos. 451 and 452/SRT/2025 (ITAT Surat); no law-report citation traced. It bears on section 272A(1)(d), section 142(1), section 273B, section 147, section 144, section 144B, section 250 of the Income Tax Act 1961, in Penalty, Assessment & Scrutiny and Faceless Assessment & Appeals matters.
This is the middle ground that practitioners actually land on, and the one the reported taxpayer-side orders do not show. The Tribunal accepted the per-default multiplication as a matter of construction — so an argument that the default is 'single' has no support here — but treated reasonable cause as divisible, cutting the penalty to one default's worth. The facts that carried it were a previous counsel who put his own email address in Form 35 and then answered nothing, an affidavit about the assessee's personal circumstances over a stated period, and her being a primary school teacher with no exposure to tax proceedings. What cost her the rest was that she admittedly received the final show-cause notice, had a local counsel, and still filed nothing in reply to the two penalty show-cause notices.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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For assessment year 2018-19 the assessee's father had bought a property; after his death on 18-08-2016 the assessee and seven siblings were added as legal heirs, and on 22-12-2017 her mother sold the property for Rs 61,00,000, of which Rs 60,00,000 was remitted directly to the bank holding the mortgage. The assessee, a primary school teacher, said she received nothing. The assessment was completed ex parte under section 147 read with sections 144 and 144B on 16-03-2023 at Rs 61,03,941. The Assessing Officer initiated penalty proceedings under section 272A(1)(d) for non-compliance with statutory notices, issued two penalty show-cause notices to which no reply was filed, and by order dated 25-08-2023 levied Rs 10,000 on each of three defaults, Rs 30,000 in all. The CIT(A)/NFAC confirmed it ex parte by order dated 11-03-2025. Before the Tribunal the assessee said she had received only the final show-cause notice during the assessment; that her former counsel had entered his own email address in Form 35 and neither answered the CIT(A)'s notices nor told her of them; and she filed an affidavit as to her personal circumstances between 17-12-2023 and 15-03-2024.
The penalty appeal was partly allowed. Section 272A(1)(d) provides for a penalty of Rs 10,000 per default, and the Assessing Officer had levied for three defaults; but on the chronology of notices, the submissions, the affidavit and the peculiar circumstances of the assessee, the penalty was restricted to Rs 10,000 (paragraph 19.2). Reasonable cause under section 273B existed for some of the defaults but the assessee could not escape responsibility altogether (paragraph 19.1).
The Tribunal recorded that both the assessment and the first appellate proceedings had concluded ex parte, and that the explanation — the previous counsel's failure to communicate, the assessee's adverse personal circumstances, and her limited exposure to tax proceedings — had not been controverted by the Revenue with cogent material, so the element of reasonable cause under section 273B could not be completely ignored (paragraph 18). It then stated the principle that penalty under section 272A(1)(d) is not automatic and must be imposed only where the failure is wilful, deliberate and without cause (paragraph 19). Against that it held that complete innocence could not be attributed: the assessee admittedly received the final show-cause notice before the assessment, was represented by a local counsel, did nothing to contact the department thereafter, and filed no reply to either penalty show-cause notice, which indicated laxity and a failure to exercise due diligence (paragraph 19.1). Balancing the two, it kept one default's worth of penalty and deleted the rest (paragraph 19.2).
Section 272A(1)(d) of the Act provides for penalty of Rs.10,000/- per default. The AO has levied penalty for three defaults amounting to Rs.30,000/-.
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Handle my notice → Ask a CA on WhatsAppYes, the section provides a penalty of Rs 10,000 per default and the Assessing Officer may levy one for each unanswered notice; the Surat Bench said so in terms. But section 273B is not all-or-nothing on the facts: finding that reasonable cause existed for some of the defaults and not for others, the Tribunal restricted the total from Rs 30,000 to Rs 10,000. This was decided by the ITAT (Shri Sanjay Garg, Judicial Member and Shri Bijayananda Pruseth, Accountant Member) and bears on section 272A(1)(d), section 142(1), section 273B, section 147, section 144, section 144B, section 250 of the Income Tax Act 1961. It is reported as ITA Nos. 451 and 452/SRT/2025 (ITAT Surat); no law-report citation traced. This is the middle ground that practitioners actually land on, and the one the reported taxpayer-side orders do not show. The Tribunal accepted the per-default multiplication as a matter of construction — so an argument that the default is 'single' has no support here — but treated reasonable cause as divisible, cutting the penalty to one default's worth. The facts that carried it were a previous counsel who put his own email address in Form 35 and then answered nothing, an affidavit about the assessee's personal circumstances over a stated period, and her being a primary school teacher with no exposure to tax proceedings. What cost her the rest was that she admittedly received the final show-cause notice, had a local counsel, and still filed nothing in reply to the two penalty show-cause notices. If it applies to you, the first step is this: Do not argue that three unanswered notices are one default — argue instead that reasonable cause attaches to each default separately, and put your evidence on a notice-by-notice basis.
For assessment year 2018-19 the assessee's father had bought a property; after his death on 18-08-2016 the assessee and seven siblings were added as legal heirs, and on 22-12-2017 her mother sold the property for Rs 61,00,000, of which Rs 60,00,000 was remitted directly to the bank holding the mortgage. The assessee, a primary school teacher, said she received nothing. The assessment was completed ex parte under section 147 read with sections 144 and 144B on 16-03-2023 at Rs 61,03,941. The Assessing Officer initiated penalty proceedings under section 272A(1)(d) for non-compliance with statutory notices, issued two penalty show-cause notices to which no reply was filed, and by order dated 25-08-2023 levied Rs 10,000 on each of three defaults, Rs 30,000 in all. The CIT(A)/NFAC confirmed it ex parte by order dated 11-03-2025. Before the Tribunal the assessee said she had received only the final show-cause notice during the assessment; that her former counsel had entered his own email address in Form 35 and neither answered the CIT(A)'s notices nor told her of them; and she filed an affidavit as to her personal circumstances between 17-12-2023 and 15-03-2024. The matter was decided on 2025-12-03 by the ITAT (Shri Sanjay Garg, Judicial Member and Shri Bijayananda Pruseth, Accountant Member). On those facts the ITAT held as follows. The penalty appeal was partly allowed. Section 272A(1)(d) provides for a penalty of Rs 10,000 per default, and the Assessing Officer had levied for three defaults; but on the chronology of notices, the submissions, the affidavit and the peculiar circumstances of the assessee, the penalty was restricted to Rs 10,000 (paragraph 19.2). Reasonable cause under section 273B existed for some of the defaults but the assessee could not escape responsibility altogether (paragraph 19.1).
The Tribunal recorded that both the assessment and the first appellate proceedings had concluded ex parte, and that the explanation — the previous counsel's failure to communicate, the assessee's adverse personal circumstances, and her limited exposure to tax proceedings — had not been controverted by the Revenue with cogent material, so the element of reasonable cause under section 273B could not be completely ignored (paragraph 18). It then stated the principle that penalty under section 272A(1)(d) is not automatic and must be imposed only where the failure is wilful, deliberate and without cause (paragraph 19). Against that it held that complete innocence could not be attributed: the assessee admittedly received the final show-cause notice before the assessment, was represented by a local counsel, did nothing to contact the department thereafter, and filed no reply to either penalty show-cause notice, which indicated laxity and a failure to exercise due diligence (paragraph 19.1). Balancing the two, it kept one default's worth of penalty and deleted the rest (paragraph 19.2). In the words reproduced by the source cited on this page: "Section 272A(1)(d) of the Act provides for penalty of Rs.10,000/- per default. The AO has levied penalty for three defaults amounting to Rs.30,000/-."
It was decided by the ITAT on 2025-12-03 and is reported as ITA Nos. 451 and 452/SRT/2025 (ITAT Surat); 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 273B, section 147, section 144, section 144B, section 250, 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 cuts both ways and is cited by both sides. The penalty appeal was partly allowed. Section 272A(1)(d) provides for a penalty of Rs 10,000 per default, and the Assessing Officer had levied for three defaults; but on the chronology of notices, the submissions, the affidavit and the peculiar circumstances of the assessee, the penalty was restricted to Rs 10,000 (paragraph 19.2). Reasonable cause under section 273B existed for some of the defaults but the assessee could not escape responsibility altogether (paragraph 19.1). It arises in Penalty, Assessment & Scrutiny and Faceless Assessment & Appeals matters, on section 272A(1)(d), section 142(1), section 273B, section 147, section 144, section 144B, section 250 of the Income Tax Act 1961, and was decided by Shri Sanjay Garg, Judicial Member and Shri Bijayananda Pruseth, Accountant Member. 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. If a former representative gave his own email address in Form 35 and did not pass the notices on, get that on record: the Form 35 itself shows the email, and it is what separated the defaults the Tribunal excused from the ones it did not. File an affidavit covering the exact period of the personal circumstances relied on; the Tribunal recorded that the Revenue had not controverted the explanation with cogent material. Answer the penalty show-cause notices even if you have already lost the assessment — the Tribunal held complete innocence could not be attributed precisely because no reply was filed to the two penalty show-cause notices.
Searched for later treatment; none was found. That is not the same as a source affirming it. The citator search (doc 86425116, confirmed as 'Jaya Rinkubhai Bandukwala, Surat vs ITO, Ward 3(3)(1)') returns nothing. A second probe for 'Bandukwala' across High Courts returned 166 decisions, none of them this assessee and none an income-tax matter - they are Bombay, Karnataka, Rajasthan and Delhi High Court property and family disputes. No appeal against the s.272A(1)(d) ruling was found. Nothing overruling, doubting or distinguishing it was found, and no appeal to a High Court against it is disclosed on the record searched. 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 dates in the order do not all hold together. Paragraph 14 lists the three unanswered statutory notices as dated 02.12.2022, 31.12.2023 and 13.01.2023 — the middle date must be a slip for 31.12.2022, since the assessment order was passed on 16.03.2023. The same paragraph gives the penalty show-cause notices as 21.02.2022 and 28.06.2023 whereas paragraph 19.1 gives them as 21.02.2023 and 28.06.2023; take 2023 in both places. The quantum appeal (ITA No. 451/SRT/2025) was allowed for statistical purposes and remitted for de novo examination; that part of the order is not the subject of this entry. 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 penalty appeal was partly allowed. Section 272A(1)(d) provides for a penalty of Rs 10,000 per default, and the Assessing Officer had levied for three defaults; but on the chronology of notices, the submissions, the affidavit and the peculiar circumstances of the assessee, the penalty was restricted to Rs 10,000 (paragraph 19.2). Reasonable cause under section 273B existed for some of the defaults but the assessee could not escape responsibility altogether (paragraph 19.1).
TaxSphere, “Jaya Rinkubhai Bandukwala v ITO, Ward 3(3)(1), Surat”, https://taxnotice.vittsphere.com/caselaw/case/jaya-bandukwala-v-ito-272a1d-ten-thousand-per-default-restricted-on-273b/ (validity last checked 2026-09-08)
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