Summary of this article
ITAT Pune condones delay in filing appeals
Rs 90.09 lakh penalty remains unresolved
Taxpayers should respond promptly to income tax
The Income Tax Appellate Tribunal (ITAT), Pune Bench, has granted a taxpayer another opportunity to challenge a penalty of Rs 90.09 lakh imposed on him. This came after he failed to file an income tax return (ITR) after selling a property. In the order, the tribunal looked down on the delay in filing appeals, while also directing a fresh examination of the assessment and penalty disputes. However, it did not cancel the penalty or rule on the merits of the underlying tax disputes.
The case concerns Gnyanoba Dagadu Masurkar versus the Income Tax Officer, Ward 6(5), Pune.
What Was The Case
The Income Tax Department had received information that Masurkar had sold immovable property during the financial year 2016-16. Tax had been deducted at source (TDS) on the transaction under Section 194-IA of the Income-tax Act, 1961. However, it was observed that the taxpayer did not file an ITR for the relevant assessment year. The department issued a notice under Section 148 on February 17, 2023, seeking to reopen the assessment. The notices after that requested information and explanation from the taxpayer under Section 142(1). The Income Tax Department also sought details from the builder. According to a report by Livemint, the taxpayer did not respond to any of these notices.
The assessing officer completed the assessment on March 19, 2024, in which he treated Rs 2.65 crore as short-term capital gains (STCG). Accordingly, the Income Tax Department then imposed a penalty of Rs 90.09 lakh.
The taxpayer challenged the assessment and the penalty before the Commissioner of Income Tax (Appeals). The appeals were dismissed because they were filed after the prescribed time limit, and his explanation was not concrete.
After this rejection, he approached the ITAT Pune Bench. His argument stated that the delay was not deliberate. He mentioned that he faced circumstances beyond his control which had prevented him from filing the appeals on time. The bench considered hearing his explanation. The taxpayer also referred to Supreme Court judgments on delays in appeals. The bench concluded that there was sufficient cause behind the delay.
What This Means For Taxpayers
The decision does not establish that the assessment or the penalty was incorrect. The case highlighted the importance of filing ITRs, responding promptly to income tax notices, and maintaining documents that are related to property transactions.
