ITAT Chandigarh Upholds Penalty Under Section 272A(2)(e) for 5.5-Year Delay in ITR-V Submission Despite NIL Income

The procedural framework of the Income Tax Act, 1961, mandates not only the timely filing of income tax returns but also their proper verification. A mere electronic upload of the return data, devoid of subsequent verification—either digitally or via the physical submission of the ITR-V form—renders the entire filing process legally incomplete. This principle was recently reinforced in the judicial pronouncement by the ITAT Chandigarh in the matter of St. Joseph Educational Society Vs ITO.

The Tribunal’s order serves as a critical reminder that a declared NIL income does not absolve an assessee from statutory filing obligations, nor does it provide immunity against penal provisions when procedural defaults are profound and prolonged. In this matter, the Tribunal upheld a penalty amounting to ₹2,06,200 levied under Section 272A(2)(e) of the Income Tax Act, 1961, stemming from an extraordinary delay of approximately 5½ years in the submission of the verification document.

Factual Matrix of the Dispute

The controversy revolves around the compliance timeline for the Assessment Year (AY) 2015-16. As per the facts documented in the order, the assessee, an educational society, initiated the electronic filing of its income tax return on 29.10.2015. This return was filed utilizing the Permanent Account Number (PAN) AAMAS8435Q, wherein the assessee declared a NIL income.

While the electronic data was successfully transmitted to the departmental portal, the mandatory verification process was left incomplete. The assessee neither utilized electronic verification methods nor dispatched the physically signed ITR-V to the Centralized Processing Centre (CPC) within the statutorily permitted timeframe. Consequently, the CPC categorized the uploaded return as invalid, notifying the assessee that the document would remain legally non-existent unless a formal application for condonation of delay was submitted and subsequently approved by the competent tax authorities.

The situation remained dormant for several years until the assessee finally transmitted the ITR-V to the CPC on 28.03.2022—a staggering delay of nearly 5½ years from the date of the initial electronic upload.

The Complication of Dual PANs

Adding a layer of complexity to the proceedings was the discovery that the assessee was operating with two distinct PANs. Alongside AAMAS8435Q, the assessee also held PAN AACAS3273Q.

The tax department’s intelligence systems flagged significant cash deposits in a bank account linked to the second PAN (AACAS3273Q). Upon reviewing the records, the assessing authorities noted that no income tax return had been filed under this specific PAN for the relevant assessment year. Prompted by this information, the department initiated reassessment proceedings and issued a notice under Section 148 of the Income Tax Act, 1961, on 29.03.2022.