Section 270A IT Act | Probate Delay Constitutes 'Reasonable Cause' for Delayed Return Filing : ITAT Kolkata

The Income Tax Appellate Tribunal, Kolkata, has held that penalty under Section 270A of the Income-tax Act cannot be imposed on executors of a deceased person’s estate when delay in filing the return stems solely from the time required to obtain probate. This ruling affirms that such delays, arising from judicial processes beyond the control of the assessee, constitute a bona fide explanation under Section 270A(6).

Background & Facts

The Dispute

The appeal arises from a penalty of Rs. 12,77,227/- levied under Section 270A(2)(b) of the Income-tax Act, 1961, against the Estate of Binoy Kumar Chandra for the Assessment Year 2020-21. The penalty was imposed for failure to file the income tax return within the statutory time limit, despite the fact that the deceased had no legal representative capable of filing the return until probate was granted.

Key Facts

• Shri Binoy Kumar Chandra died on 13.06.2019.
• His last will was dated 13.06.2019, naming his sons, Shri Uday Kumar Chandra and Shri Suvro Chandra, as executors.
• A petition for probate was filed before the Calcutta High Court on 26.08.2021.
• Probate was granted by the Calcutta High Court on 09.03.2022 and received on 15.03.2022.
• The due date for filing the return for AY 2020-21 was 31.07.2020, which had long expired by the time probate was obtained.
• The executors could not file the return until they were legally recognized as representative assesses.
• On 06.02.2024, the Assessing Officer issued notice under Section 148A(b).
• The assessee responded by admitting income as per Form 26AS and explaining the delay due to probate proceedings.
• Notice under Section 148 was issued on 22.03.2024.
• The return was filed on 10.05.2024, declaring total income of Rs. 80,68,052/-, matching Form 26AS, with taxes and interest paid.
• Assessment was completed on 17.12.2024, accepting the declared income.
• Penalty under Section 270A was imposed on 23.06.2024.
• The Commissioner of Income Tax (Appeals) confirmed the penalty on 17.09.2025.

Procedural History

• 13.06.2019: Death of Shri Binoy Kumar Chandra
• 26.08.2021: Probate petition filed before Calcutta High Court
• 09.03.2022: Probate granted by Calcutta High Court
• 15.03.2022: Probate order received by executors
• 06.02.2024: Notice under Section 148A(b) issued
• 22.03.2024: Notice under Section 148 issued
• 10.05.2024: Return filed with declared income and tax payment
• 17.12.2024: Assessment order passed accepting return
• 23.06.2024: Penalty order issued under Section 270A
• 17.09.2025: CIT(A) order confirming penalty
• 15.04.2026: ITAT Kolkata order allowing appeal

Relief Sought

The appellant sought deletion of the penalty of Rs. 12,77,227/- levied under Section 270A, arguing that the delay in filing was due to unavoidable judicial process and that the explanation was bona fide under Section 270A(6).

The Legal Issue

The central question was whether the failure to file a return of income by executors of a deceased person’s estate, due to the time required to obtain probate from the High Court, constitutes a "bona fide explanation" under Section 270A(6) of the Income-tax Act, thereby excluding such income from being treated as "unreported income" for penalty purposes.

Arguments Presented

For the Appellant

The assessee contended that the executors were legally incapacitated from filing the return until probate was granted, as no legal authority existed to represent the estate. The delay was not due to negligence or concealment, but due to the mandatory judicial process under the Indian Succession Act. The income declared was fully disclosed and matched Form 26AS, with taxes and interest paid. Reliance was placed on the Income Tax Department’s FAQs on Representative Assessee, which state that registration as representative assessee requires a court order appointing the executor. The executors acted promptly upon receipt of probate and complied with all notices.

For the Respondent

The Revenue argued that the return was filed belatedly and that the executors had sufficient time after the death of the assessee to initiate probate proceedings. It was contended that delay in filing, regardless of cause, attracts penalty under Section 270A unless the assessee proves lack of reasonable cause. The Revenue maintained that the CIT(A) correctly held that no valid explanation was offered.

The Court's Analysis

The Tribunal carefully examined the statutory framework under Section 270A(6), which explicitly excludes from "unreported income" any amount where the assessee offers a bona fide explanation and discloses all material facts. The Tribunal noted that the income declared was not concealed; it was fully reflected in Form 26AS with TDS deducted at 10%. The executors acted immediately upon receiving probate and filed the return within days.

"We are of the view that the explanation of the executors is reasonable and bonafide and the reasons for not filing of return are beyond the control and capacity of the executors."

The Tribunal further relied on the Income Tax Department’s own FAQs, particularly Q4 and Q7, which clarify that legal heirs or executors can only register as representative assesses upon production of a court order appointing them. This establishes that the legal obligation to file arises only after probate is granted. The Tribunal held that the executors could not have filed earlier without violating the legal framework governing succession.

Additionally, the Tribunal took judicial notice of the Supreme Court’s suo moto extension of limitation periods from 20.03.2020 to 28.02.2022 due to the COVID-19 pandemic, noting that the probate process was delayed during this period. The probate was granted on 09.03.2022, squarely within the extended period, further reinforcing the reasonableness of the delay.

The Tribunal concluded that the penalty under Section 270A was neither legally tenable nor factually justified, as the conditions for exemption under Section 270A(6) were fully satisfied.

The Verdict

The appeal was allowed. The Tribunal set aside the order of the CIT(A) dated 17.09.2025 and directed the Assessing Officer to delete the penalty of Rs. 12,77,227/- levied under Section 270A. The order was passed on 15.04.2026.

What This Means For Similar Cases

Probate Delay Is a Valid Reason for Non-Filing

• Practitioners representing estates of deceased taxpayers must now argue that delay in filing due to probate proceedings qualifies as a bona fide explanation under Section 270A(6)
• The burden shifts to the Revenue to prove mala fide intent or concealment - mere delay is insufficient
• Executors must retain copies of probate orders, death certificates, and correspondence with the court as documentary proof

Department’s Own FAQs Bind the Revenue

• The Income Tax Department’s FAQs on Representative Assessee are binding on adjudicating authorities
• If the Department itself states that probate is mandatory before representation, it cannot later penalize for delay caused by that requirement
• Practitioners should cite these FAQs in appeals and writ petitions to counter arbitrary penalty imposition

COVID-Related Delays Are Judicially Recognized

• The ITAT explicitly acknowledged the impact of the Supreme Court’s limitation extension on probate timelines

• Future cases involving delays between 20.03.2020 and 28.02.2022 may invoke this precedent to argue for waiver of penalties

• Courts and tribunals are increasingly recognizing systemic delays caused by pandemic-related court closures as force majeure

• Executors must file returns within 30 days of receiving probate to maintain the bona fide nature of the explanation

• All tax payments must be made simultaneously with return filing to avoid additional interest or penalties under other provisions

• This judgment reinforces that tax law must accommodate the realities of succession law - not penalize compliance with it