Top Stories Failure to respond to Income Tax Notice justified by Pathology Reports: Madras HC sets aside Assessment and Penalty Orders conditionally [Read Order] To balance revenue interests and procedural fairness, the bench of SenthiLkumar Ramamoorthy set aside the impugned orders on the condition that the petitioner remits ₹2,00,000/- towards the tax demand within four weeks By Navasree A.M – On December 25, 2024 4:31 pm – 2 mins read The Madras High Court has conditionally set aside assessment and penalty orders issued against a petitioner for the assessment year 2015-16, citing health issues as a valid reason for failing to respond to income tax notices. The court admitted the pathology reports as evidence for not Responding to Income Tax Notice.

The petitioner, a legal heir of the late Shri Achuthan Nair, had sold an immovable property in February 2014 and deposited the sale proceeds in a bank account. The subsequent creation of fixed deposits totaling ₹60,04,090/- triggered proceedings under the Income Tax Act, 1961. Step by Step Guidance for Tax Audit & E-filing, Click Here The petitioner did not respond to notices issued under Sections 148A(b), 148, and 142(1), nor to subsequent show-cause notices. This led to the issuance of an assessment order on December 29, 2023, and a penalty order on June 20, 2024. The petitioner explained the non-compliance by citing a diagnosis of Grade 2 Carcinoma of the tongue in October 2023, supported by pathology reports from the Cancer Institute, Adyar. Since the petitioner did not respond to several notices issued earlier, on instructions, the counsel submitted that the petitioner agrees to remit a sum of Rs.2,00,000/- towards the income tax demand as a condition for remand. The Court noted that while the petitioner’s diagnosis occurred after some notices were issued, the show-cause notices in August and December 2023 coincided with the period of illness. The Court found this explanation acceptable for the failure to respond during that time but underlined the petitioner’s overall non-compliance since the initiation of proceedings in April 2022.

Step by Step Guidance for Tax Audit & E-filing, Click Here To balance revenue interests and procedural fairness, the bench of Senthilkumar Ramamoorthy set aside the impugned orders on the condition that the petitioner remits ₹2,00,000/- towards the tax demand within four weeks. The petitioner was also allowed to file a reply to the show-cause notice, with the assessing officer directed to provide a personal hearing via video conferencing and issue a fresh order within four months. Ms.G.Vardini Karthik and Dr.B.Ramaswamy, Sr. SC appeared for the petitioner and the respondents before the court.