Income Tax Appellate Tribunal - Delhi
Dharam Pal Singh,Bulandshahr vs Assessment Unit Income Tax Department, ... on 22 April, 2026
INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "C": NEW DELHI
BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER
AND
SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER
ITA No. 3101/Del/2025
(Assessment Year: 2018-19)
Dharam Pal Singh, Vs. Assessment Unit,
Prop Dharam Gases, 395, Income Tax
Delhi Road, Civil Lines, Department
Kalaam, Bulandshahr, UP
(Appellant) (Respondent)
PAN: AEBPS5118N
Assessee by : None
Revenue by: Shri Om Prakash, Sr. DR
Date of Hearing 09/03/2026
Date of pronouncement /04/2026
ORDER
PER M. BALAGANESH, A. M.:
1. The appeal in ITA No. 3101/Del/2025 for AY 2018-19, arises out of the order of the ld National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as 'ld. CIT(A)', in short] dated 11.03.2025 against the order of assessment passed u/s 271B of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 07.09.2023 by the Assessing Officer, NFAC, Delhi (hereinafter referred to as 'ld. AO').
2. The only effective issue to be decided in this appeal is as to whether the Learned CITA was justified in confirming the levy of penalty under section 271B of the Act in the facts and circumstances of the instant case.
Page | 1 ITA No. 3101/Del/2025 Dharam Pal Singh
3. None appeared on behalf of the assessee despite issuance of notice. Hence we proceed to dispose of this appeal on hearing the Learned DR and based on materials available on record. The Assessee is an individual and had not filed his return of income for the assessment year 2018-19. The Learned AO received information that the Assessee had made cash deposit of Rs. 3,22,49,500 in his bank account with Indian Bank and had earned interest income of Rs. 10,961 in his bank account with Central Bank of India. Accordingly, the Learned AO after analysing the information, issued a Show-cause notice under Section 148A(b) of the Act requesting the Assessee to explain the above transactions. The Assessee did not file any reply to the notice within the time allotted. Thereafter, the Learned AO passed an order under Section 148A(d) of the Act on 27-03-2022 after taking the requisite approval from the Specified Authority and issued notice under Section 148 of the Act on 27-03-2022 by re-opening the case of the Assessee. In response to the notice issued under Section 148 of the Act, the Assessee filed his return of income declaring total income of Rs. 5,89,550 under the head 'income from business and profession' of Rs. 5,78,691 and 'income from other sources' of Rs. 15,765 on 27-03-2022. The Learned AO observed that Assessee had shown gross receipts of business at Rs. 7,67,16,407 but had failed to get his accounts audited as required under Section 44AB of the Act. Accordingly, the Learned AO initiated Penalty Proceedings under Section 271B of the Act for failure of the Assessee to get his accounts audited. The Assessee, vide letter dated 22-08-2023 replied that his real brother Mr. Mahipal Singh expired on 12-09- 2018 and due to the said fact, the Assessee was disturbed mentally and could not file his return of income in time and submit the audit report on or before the due date as specified in the Act. The Assessee placed Page | 2 ITA No. 3101/Del/2025 Dharam Pal Singh reliance on the Coordinate Bench decision of Delhi Tribunal in his own case for Assessment Years 2010-11 and 2011-12 in ITA Nos. 7315 and 7316/Del/2018 wherein the penalty levied under Section 271B of the Act was deleted by the Tribunal.
4. We find that Assessee before the lower authorities had submitted that he is engaged in the business of necessary supply of essential commodity LPG, which is a primary need of cooking food for registered consumers of BPCL under the guidelines/ norms of Government of India and that he is only a commission agent as an authorized distributor of BPCL. It was submitted that his income is only in the form of commission and that the commission income had not crossed the threshold limit prescribed under section 44AB of the Act and that he is not bound to get his accounts audited. No factual finding has been given by the revenue in this regard. In our considered opinion, this aspect requires factual verification by the learned AO with the documentary evidences and in case if Assessee is only acting as a commission agent for BPCL, which fact could also be verified from the records of BPCL, we deem it fit and appropriate, in the interest of justice and fair play, to first decide the nature of actual activity carried out by the Assessee so as to determine whether the provisions of section 44AB per se could be made applicable to the Assessee in the facts and circumstances of the instant case. Pursuant to this verification, the learned AO shall decide the issue of levy of penalty afresh. With these observations the grounds raised by the Assessee are allowed for statistical purposes by restoring to the file of learned AO for adjudication in the above mentioned terms.
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5. In the result, the appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open court on 22/04/2026.
-Sd/- -Sd/-
(YOGESH KUMAR U.S.) (M. BALAGANESH)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 22/04/2026
A K Keot
Copy forwarded to
1. Applicant
2. Respondent
3. CIT
4. CIT (A)
5. DR:ITAT
ASSISTANT REGISTRAR
ITAT, New Delhi
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