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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
This appeal by the assessee is directed against order dated 29.12.2022 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2015-16 in relation to levy of penalty by the Assessing Officer for non-filing of regular return of income for the year under consideration. The grounds raised by the assessee are reproduced as under:
M/s Sanjeev Chirania HUF M/s Sanjeev Chirania HUF 2 ITA No. 251/M/2023
On the facts and in the circumstances of the case and in 1. On the facts and in the circumstances of the case and in 1. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax law, the Ld. Commissioner of Income Tax (Appeals) erred in (Appeals) erred in upholding the order passed by the Ld. Assessing Officer upholding the order passed by the Ld. Assessing Officer upholding the order passed by the Ld. Assessing Officer W/s 271F of the Income Tax Act, 1961 imposing penalty of W/s 271F of the Income Tax Act, 1961 imposing penalty of W/s 271F of the Income Tax Act, 1961 imposing penalty of Rs 5,000/-.
On the facts and in the circumstances of the appellant's 2. On the facts and in the circumstances of the appellant's 2. On the facts and in the circumstances of the appellant's case and in law, the Ld.Commissioner of Income Tax case and in law, the Ld.Commissioner of Income Tax case and in law, the Ld.Commissioner of Income Tax (Appeals) Appeals) Appeals) erred erred erred in in in sustaining sustaining sustaining the the the penalty penalty penalty by by by not not not appreciating that the belief of the assessee that he is not appreciating that the belief of the assessee that he is not appreciating that the belief of the assessee that he is not under obligation to file return of income, his income for the under obligation to file return of income, his income for the under obligation to file return of income, his income for the impugned year being far below the maximum amount not impugned year being far below the maximum amount not impugned year being far below the maximum amount not chargeable to tax, constitutes re chargeable to tax, constitutes reasonable cause for non asonable cause for non- filing and hence is not liable to penalty. filing and hence is not liable to penalty. 2. Briefly stated, facts of the case are that the regular return of Briefly stated, facts of the case are that the regular return of Briefly stated, facts of the case are that the regular return of income was not filed by the assessee. Subsequently, notice u/s 148 not filed by the assessee. Subsequently, notice u/s 148 not filed by the assessee. Subsequently, notice u/s 148 of the Income-tax Act, 1961 (in short ‘the Act’) was tax Act, 1961 (in short ‘the Act’) was issued on tax Act, 1961 (in short ‘the Act’) was 31.03.2021asking the assessee to file its return of income asking the assessee to file its return of income asking the assessee to file its return of income. In response the assessee filed return of income declaring total income response the assessee filed return of income declaring total income response the assessee filed return of income declaring total income of Rs.22,440/- on 30.04.2021. The reassessment u/s 147 of the Act on 30.04.2021. The reassessment u/s 147 of the Act on 30.04.2021. The reassessment u/s 147 of the Act was completed on 27.03.2022 wherein the total income was was completed on 27.03.2022 wherein the total inc was completed on 27.03.2022 wherein the total inc assessed at Rs.4,88,05,223/ assessed at Rs.4,88,05,223/-. In view of the assesse . In view of the assessed income, the Assessing Officer was of the view that the income of the assessee Assessing Officer was of the view that the income of the assessee Assessing Officer was of the view that the income of the assessee being more than the threshold minimum taxable income, the being more than the threshold minimum taxable income, the being more than the threshold minimum taxable income, the assessee was liable liable for filing return of income and for filing return of income and for non- compliance of the same compliance of the same, he initiated penalty proceedings u/s 271F he initiated penalty proceedings u/s 271F r.ws. 274 of the Act along with assessment order passed on r.ws. 274 of the Act along with assessment order passed on r.ws. 274 of the Act along with assessment order passed on 27.03.2022. After considering the submission of the assessee, he 27.03.2022. After considering the submission of the assessee, he 27.03.2022. After considering the submission of the assessee, he levied penalty of Rs.5,000/ levied penalty of Rs.5,000/- as prescribed u/s 271F of the Act. as prescribed u/s 271F of the Act. On further appeal before the Ld. CIT(A), the assessee submitted that he further appeal before the Ld. CIT(A), the assessee submitted that he further appeal before the Ld. CIT(A), the assessee submitted that he M/s Sanjeev Chirania HUF M/s Sanjeev Chirania HUF 3 was under bona fide belief that his income was not taxable which is was under bona fide belief that his income was not taxable which is was under bona fide belief that his income was not taxable which is being a reasonable cause reasonable cause, the penalty might be deleted. The Ld. he penalty might be deleted. The Ld. CIT(A) however, upheld the penalty observing as under: CIT(A) however, upheld the penalty observing as unde CIT(A) however, upheld the penalty observing as unde “4.1 Further, during the Penalty proceedings, the 4.1 Further, during the Penalty proceedings, the 4.1 Further, during the Penalty proceedings, the Assessing Officer issued show cause notice u/s 274 Assessing Officer issued show cause notice u/s 274 Assessing Officer issued show cause notice u/s 274 r.w.s. 271F of the Income Tax Act dated 27.03.2022 and r.w.s. 271F of the Income Tax Act dated 27.03.2022 and r.w.s. 271F of the Income Tax Act dated 27.03.2022 and on 03.08.2022 to Appellant as to why an order imposing on 03.08.2022 to Appellant as to why an order imposing on 03.08.2022 to Appellant as to why an order imposing penalty us 271F of the Act should not be p penalty us 271F of the Act should not be passed for the assed for the non-compliance of notice issue during the assessment compliance of notice issue during the assessment compliance of notice issue during the assessment proceedings. In response to these show cause notices the proceedings. In response to these show cause notices the proceedings. In response to these show cause notices the Appellant submitted that the appellant was having Appellant submitted that the appellant was having Appellant submitted that the appellant was having bonafide belief that the income being far below taxable bonafide belief that the income being far below taxable bonafide belief that the income being far below taxable limit as prescribed, hence limit as prescribed, hence the appellant was not liable to the appellant was not liable to file its return of income and also appellant was under no file its return of income and also appellant was under no file its return of income and also appellant was under no obligation obligation obligation to to to file file file its its its return return return of of of income, income, income, which which which constitutes'reasonable cause. The AO, however, was not constitutes'reasonable cause. The AO, however, was not constitutes'reasonable cause. The AO, however, was not impressed with the contention of the appellant and impressed with the contention of the appellant and impressed with the contention of the appellant and opined that opined that the income of the assessee has been the income of the assessee has been assessed at an amount, which is more than the assessed at an amount, which is more than the assessed at an amount, which is more than the maximum amount chargeable to tax, hence the filing of maximum amount chargeable to tax, hence the filing of maximum amount chargeable to tax, hence the filing of return of income was necessary and thereafter proceeded return of income was necessary and thereafter proceeded return of income was necessary and thereafter proceeded to levy penalty of Rs.5,000/ to levy penalty of Rs.5,000/- as per the provisions of as per the provisions of section 271F of the Act. 71F of the Act.
5. The provisions of section 271F of the Act states that 5. The provisions of section 271F of the Act states that 5. The provisions of section 271F of the Act states that penalty of Rs. 5,000/ penalty of Rs. 5,000/-for late filing of return of income. for late filing of return of income. The provision of section 271F of IT act is as below: The provision of section 271F of IT act is as below: The provision of section 271F of IT act is as below: "Penalty for failure to furnish return of income. "Penalty for failure to furnish return of income. 271F. If a person who If a person who is required to furnish a return of his is required to furnish a return of his income, as required under sub income, as required under sub-section (1) of section 139 section (1) of section 139 or by the provisos to that sub or by the provisos to that sub-section, fails to furnish section, fails to furnish such return before the end of the relevant assessment such return before the end of the relevant assessment such return before the end of the relevant assessment year, the Assessing Officer may direct that such year, the Assessing Officer may direct that such year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand shall pay, by way of penalty, a sum of five thousand shall pay, by way of penalty, a sum of five thousand rupees."
M/s Sanjeev Chirania HUF M/s Sanjeev Chirania HUF 4 ITA No. 251/M/2023
6. It is clear from bare reading of the above provision that 6. It is clear from bare reading of the above provision that 6. It is clear from bare reading of the above provision that whether or not the penalty as envisaged in Section 271F whether or not the penalty as envisaged in Section 271F whether or not the penalty as envisaged in Section 271F is to be imposed, is a matter to be determined by the is to be imposed, is a matter to be determined by the is to be imposed, is a matter to be determined by the Assessing Offic Assessing Officer within the meaning of the section. He er within the meaning of the section. He may direct such penalty to be paid and conversely, it may direct such penalty to be paid and conversely, it may direct such penalty to be paid and conversely, it would be correct to say, he may choose not to direct for would be correct to say, he may choose not to direct for would be correct to say, he may choose not to direct for such penalty to be paid. To determine whether the such penalty to be paid. To determine whether the such penalty to be paid. To determine whether the default was wilful or otherwise, the explanation offer default was wilful or otherwise, the explanation offer default was wilful or otherwise, the explanation offered, if any by the appellant, will have to be seen and if any by the appellant, will have to be seen and if any by the appellant, will have to be seen and construed. Section 273B provides that no penalty shall construed. Section 273B provides that no penalty shall construed. Section 273B provides that no penalty shall be imposed, inter alia, u/s.271F where the assessee be imposed, inter alia, u/s.271F where the assessee be imposed, inter alia, u/s.271F where the assessee establishes a reasonable cause for failure referred to in establishes a reasonable cause for failure referred to in establishes a reasonable cause for failure referred to in said section. said section.
7. The Appellant has op The Appellant has opted to remain silent during the ted to remain silent during the Assessment proceedingsand the assessment was made Assessment proceedingsand the assessment was made Assessment proceedingsand the assessment was made as ' Best Judgement Assessment' u/s 144 of the Act.It as ' Best Judgement Assessment' u/s 144 of the Act.It as ' Best Judgement Assessment' u/s 144 of the Act.It indicate that the Appellant had no intention of filing indicate that the Appellant had no intention of filing indicate that the Appellant had no intention of filing return of income till he was offered an opportunity in the return of income till he was offered an opportunity in the return of income till he was offered an opportunity in the form of notice us 148 of the Act. During the Appellate f notice us 148 of the Act. During the Appellate f notice us 148 of the Act. During the Appellate proceedings, the Appellant submitted its reply in the form proceedings, the Appellant submitted its reply in the form proceedings, the Appellant submitted its reply in the form of Paper book including the reply submitted before the AO of Paper book including the reply submitted before the AO of Paper book including the reply submitted before the AO against the show cause issued for levy of penalty us against the show cause issued for levy of penalty us against the show cause issued for levy of penalty us 271F of the Act and judicial pronounc 271F of the Act and judicial pronouncements in support ements in support of its contention. of its contention. 7.1 In the case of Shankar Lal Kumawat v. Income Tax 7.1 In the case of Shankar Lal Kumawat v. Income Tax 7.1 In the case of Shankar Lal Kumawat v. Income Tax Officer, Ward Officer, Ward-7(2), Jaipur,[2021] 125 taxmann.com 347 7(2), Jaipur,[2021] 125 taxmann.com 347 (Jaipur - Trib.), the Hon'ble ITAT JAIPUR BENCH 'A' had Trib.), the Hon'ble ITAT JAIPUR BENCH 'A' had Trib.), the Hon'ble ITAT JAIPUR BENCH 'A' had held that where assessee had not filed its return of held that where assessee had not filed its return of held that where assessee had not filed its return of income on ground that his income did not exceed ome on ground that his income did not exceed ome on ground that his income did not exceed maximum non maximum non-taxable amount as his income was exempt taxable amount as his income was exempt under section 54, in view of fact that assessee's total under section 54, in view of fact that assessee's total under section 54, in view of fact that assessee's total income without giving effect to provision of section 54 income without giving effect to provision of section 54 income without giving effect to provision of section 54 came to an amount which exceeded maximum amount came to an amount which exceeded maximum amount came to an amount which exceeded maximum amount not chargeable to tax, assessee was required to file his not chargeable to tax, assessee was required to file his not chargeable to tax, assessee was required to file his return of income, and the penalty under section 271F return of income, and the penalty under section 271F return of income, and the penalty under section 271F levied upon him was justified. levied upon him was justified. 8. Admittedly, there was a default in terms of Section 8. Admittedly, there was a default in terms of Section 8. Admittedly, there was a default in terms of Section 271F and violation of clear mandate of the statutory 271F and violation of clear mandate of the statutory 271F and violation of clear mandate of the statutory provisions of Section 271F. The quantum of Income or the ions of Section 271F. The quantum of Income or the ions of Section 271F. The quantum of Income or the interest does not alter or influence the provisions of 271F interest does not alter or influence the provisions of 271F interest does not alter or influence the provisions of 271F of I.T. Act. In the cases where the appellant is able to of I.T. Act. In the cases where the appellant is able to of I.T. Act. In the cases where the appellant is able to M/s Sanjeev Chirania HUF M/s Sanjeev Chirania HUF 5 ITA No. 251/M/2023 show or prove any reasonable cause for not furnishing show or prove any reasonable cause for not furnishing show or prove any reasonable cause for not furnishing the return of income by 31st March the return of income by 31st March of the relevant of the relevant assessment year, the provisions of Section 271F are not assessment year, the provisions of Section 271F are not assessment year, the provisions of Section 271F are not automatically imposed for late filing of the return. Section automatically imposed for late filing of the return. Section automatically imposed for late filing of the return. Section 273B of IT Act also comes to the rescue in the cases 273B of IT Act also comes to the rescue in the cases 273B of IT Act also comes to the rescue in the cases where the delay in filing of return is due to reasonable where the delay in filing of return is due to reasonable where the delay in filing of return is due to reasonable cause. Howev cause. However, it is evident from the records that the er, it is evident from the records that the appellant has not submitted any reasonable cause for appellant has not submitted any reasonable cause for appellant has not submitted any reasonable cause for not filing the return of income for the A.Y. 2015 not filing the return of income for the A.Y. 2015 not filing the return of income for the A.Y. 2015-16 in spite spite spite of of of having having having taxable taxable taxable income for income for income for the the the relevant relevant relevant assessment year, which was subsequently assessed in assessment year, which was subsequently assessed in assessment year, which was subsequently assessed in the hands of appellant. The plea that the income was hands of appellant. The plea that the income was hands of appellant. The plea that the income was below the taxable limit was never put to test during the below the taxable limit was never put to test during the below the taxable limit was never put to test during the assessment proceedings where the appellant remained assessment proceedings where the appellant remained assessment proceedings where the appellant remained non responsive. non responsive.
In view of the above discussion and considering the 9. In view of the above discussion and considering the 9. In view of the above discussion and considering the totality of the facts, I a totality of the facts, I am of the considered view that the m of the considered view that the penalty order passed us 271F of the I.T. Act by the AO on penalty order passed us 271F of the I.T. Act by the AO on penalty order passed us 271F of the I.T. Act by the AO on account of failure for furnishing the retune of income for account of failure for furnishing the retune of income for account of failure for furnishing the retune of income for the A.Y. 2015 the A.Y. 2015-16 and also not having any reasonable 16 and also not having any reasonable cause to prove for the same. Hence, it was a fit case cause to prove for the same. Hence, it was a fit case cause to prove for the same. Hence, it was a fit case for imposition of penalty under Section 271F. The penalty imposition of penalty under Section 271F. The penalty imposition of penalty under Section 271F. The penalty imposed under Section 271Fof I.T. Act is hereby imposed under Section 271Fof I.T. Act is hereby imposed under Section 271Fof I.T. Act is hereby confirmed.”
Before us, the Ld. Counsel of the assessee vehemently argued Before us, the Ld. Counsel of the assessee vehemently argued Before us, the Ld. Counsel of the assessee vehemently argued on the issue of reasonable cause for non on the issue of reasonable cause for non-filing of return of income. filing of return of income. The relevant submission of the assessee relevant submission of the assessee is reproduced as under: reproduced as under:
“6. On the facts and in the circumstances of the case On the facts and in the circumstances of the case On the facts and in the circumstances of the case and in law, the Commissioner of Income Tax (Appeals) and in law, the Commissioner of Income Tax (Appeals) and in law, the Commissioner of Income Tax (Appeals) erred in upholding the order passed by the Assessing erred in upholding the order passed by the Assessing erred in upholding the order passed by the Assessing Officer w/s 271F of the Income Tax A Officer w/s 271F of the Income Tax Act, 1961 imposing ct, 1961 imposing penalty of Rs 5,000/ penalty of Rs 5,000/- by not appreciating that the by not appreciating that the belief of the appellant that it was not under an belief of the appellant that it was not under an belief of the appellant that it was not under an obligation to file return of income as per the provisions obligation to file return of income as per the provisions obligation to file return of income as per the provisions of Income Tax Act, 1961 as its income for the captioned of Income Tax Act, 1961 as its income for the captioned of Income Tax Act, 1961 as its income for the captioned assessment year being fa assessment year being far below the maximum r below the maximum amount not chargeable to tax, constitutes reasonable amount not chargeable to tax, constitutes reasonable amount not chargeable to tax, constitutes reasonable cause for non cause for non-filing and hence is not liable to penalty. filing and hence is not liable to penalty.
M/s Sanjeev Chirania HUF M/s Sanjeev Chirania HUF 6 ITA No. 251/M/2023
Besides, it is humbly submitted before your honour 7. Besides, it is humbly submitted before your honour 7. Besides, it is humbly submitted before your honour that the father of Karta of appellant, who is 67 years that the father of Karta of appellant, who is 67 years that the father of Karta of appellant, who is 67 years old is a patient old is a patient of acute asthma and during the said of acute asthma and during the said period he was afflicted with acute breathlessness period he was afflicted with acute breathlessness period he was afflicted with acute breathlessness rendering him incapacitated to look after his own rendering him incapacitated to look after his own rendering him incapacitated to look after his own needs. Under these stressful circumstances, the Karta needs. Under these stressful circumstances, the Karta needs. Under these stressful circumstances, the Karta of appellant was forced to leave station and be with of appellant was forced to leave station and be with of appellant was forced to leave station and be with his father wh his father who lives alone in the remote village in the o lives alone in the remote village in the state of Rajasthan. The village does not have the kind state of Rajasthan. The village does not have the kind state of Rajasthan. The village does not have the kind of facilities that are available in cities and this of facilities that are available in cities and this of facilities that are available in cities and this necessitated the Karta of appellant staying with his necessitated the Karta of appellant staying with his necessitated the Karta of appellant staying with his father in fulfillment of his filial duties. Since fat father in fulfillment of his filial duties. Since fat father in fulfillment of his filial duties. Since fathers' condition was not getting better, the Karta of appellant condition was not getting better, the Karta of appellant condition was not getting better, the Karta of appellant brought his father to the city for better medical care brought his father to the city for better medical care brought his father to the city for better medical care and expert consultation. During the period under and expert consultation. During the period under and expert consultation. During the period under consideration, the spouse of Karta of appellant being in consideration, the spouse of Karta of appellant being in consideration, the spouse of Karta of appellant being in the family way also required due the family way also required due care & attention. care & attention. Subsequently the grandfather succumbed to his illness Subsequently the grandfather succumbed to his illness Subsequently the grandfather succumbed to his illness rendering the Karta of appellant unable to attend to his rendering the Karta of appellant unable to attend to his rendering the Karta of appellant unable to attend to his daily affairs. daily affairs.
As held by the Hon'ble High Court of Bombay in CIT 8. As held by the Hon'ble High Court of Bombay in CIT 8. As held by the Hon'ble High Court of Bombay in CIT Vs. Triumph International FinanceLimited [2012] 345 Vs. Triumph International FinanceLimited [2012] 345 Vs. Triumph International FinanceLimited [2012] 345 IT 270, in view of the provisions of 273B, if reasonable 0, in view of the provisions of 273B, if reasonable 0, in view of the provisions of 273B, if reasonable cause exists, no penalty is leviable. The reasons for the cause exists, no penalty is leviable. The reasons for the cause exists, no penalty is leviable. The reasons for the failure to file returns within the stipulated time was failure to file returns within the stipulated time was failure to file returns within the stipulated time was bonafide and genuine. In this context, reference is bonafide and genuine. In this context, reference is bonafide and genuine. In this context, reference is made to the observations of the Hon'ble made to the observations of the Hon'ble Bombay High Bombay High Court in the judgement cited above; Court in the judgement cited above; "The "The "The expression expression expression 'reasonable 'reasonable 'reasonable cause' cause' cause' used used used in in in Section273B is not defined under the Act. Unlike the Section273B is not defined under the Act. Unlike the Section273B is not defined under the Act. Unlike the expression 'sufficient cause' used in Section 249(3), expression 'sufficient cause' used in Section 249(3), expression 'sufficient cause' used in Section 249(3), 253(5) and 260A(2A) of the Act, the legislature has 253(5) and 260A(2A) of the Act, the legislature has 253(5) and 260A(2A) of the Act, the legislature has used the expression 'reasonable cause' in Section the expression 'reasonable cause' in Section the expression 'reasonable cause' in Section 273B of the Act. A cause which is reasonable may not 273B of the Act. A cause which is reasonable may not 273B of the Act. A cause which is reasonable may not be a sufficient cause. Thus, the expression'reasonable be a sufficient cause. Thus, the expression'reasonable be a sufficient cause. Thus, the expression'reasonable cause cause cause would would would have have have wider wider wider connotationthan connotationthan connotationthan the the the expression 'sufficient cause'. Therefore, the expression expression 'sufficient cause'. Therefore, the expression expression 'sufficient cause'. Therefore, the expression 'reasonable cause' in Section 273B for non asonable cause' in Section 273B for non-imposition imposition of penalty under Section 271 E would have to be of penalty under Section 271 E would have to be of penalty under Section 271 E would have to be construed liberally depending upon the facts of each construed liberally depending upon the facts of each construed liberally depending upon the facts of each case."
M/s Sanjeev Chirania HUF M/s Sanjeev Chirania HUF 7 The jurisdictional High Court has laid down that the The jurisdictional High Court has laid down that the The jurisdictional High Court has laid down that the legislature has deliberately used the expres legislature has deliberately used the expres legislature has deliberately used the expression 'reasonable cause' and not 'sufficient cause in section 'reasonable cause' and not 'sufficient cause in section 'reasonable cause' and not 'sufficient cause in section 273 B of the Income Tax Act, 1961 thereby construing 273 B of the Income Tax Act, 1961 thereby construing 273 B of the Income Tax Act, 1961 thereby construing that the said provision of section 273B has to be given that the said provision of section 273B has to be given that the said provision of section 273B has to be given liberal interpretation liberal interpretation.
9. It has been held that levying of penalty w/s 271F is 9. It has been held that levying of penalty w/s 271F is 9. It has been held that levying of penalty w/s 271F is not sustainable as per law as laid down in a catena of stainable as per law as laid down in a catena of stainable as per law as laid down in a catena of judgments as listed below: judgments as listed below:- a. MrsManiuKataruka vs Income Tax Officer (ITA No: a. MrsManiuKataruka vs Income Tax Officer (ITA No: a. MrsManiuKataruka vs Income Tax Officer (ITA No: 94 TTJ Kol 873) 94 TTJ Kol 873) b. Sanjay Srivastava, Ghaziabad vs Income Tax Officer b. Sanjay Srivastava, Ghaziabad vs Income Tax Officer b. Sanjay Srivastava, Ghaziabad vs Income Tax Officer (ITA No: 4348 to 4350/Del/2010) (ITA No: 4348 to 4350/Del/2010) c. R S Investment, New Del c. R S Investment, New Delhi vs ITO Ward - 30(2) (ITA 30(2) (ITA No: 1338 to 1343/Del/2011) No: 1338 to 1343/Del/2011) d. M/s Hubli Dharwad Stock Trading House vs Dy. d. M/s Hubli Dharwad Stock Trading House vs Dy. d. M/s Hubli Dharwad Stock Trading House vs Dy. Commissioner of Income Tax, Circle Commissioner of Income Tax, Circle- 1(1), Hubli (ITA 1(1), Hubli (ITA No: 891 to 902/Bang/2017) No: 891 to 902/Bang/2017) e. Hon'ble High Court of Bombay in CIT Vs. Triumph e. Hon'ble High Court of Bombay in CIT Vs. Triumph e. Hon'ble High Court of Bombay in CIT Vs. Triumph International Finance L International Finance Limited[2012] 345 ITR 270.” .”
On contrary, the Ld. Departmental Representative (DR) On contrary, the Ld. Departmental Representative (DR) On contrary, the Ld. Departmental Representative (DR) supported the order of the lower authorities and submitted that for supported the order of the lower authorities and submitted that for supported the order of the lower authorities and submitted that for non-filing the regular return of income, the assessee is filing the regular return of income, the assessee is liable for filing the regular return of income, the assessee is penalty of Rs.5,000/- - levied u/s 274F of the Act.
We have heard rival submission of the parties on the issue We have heard rival submission of the parties on the issue We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. Before us, the dispute and perused the relevant material on record. Before us, the dispute and perused the relevant material on record. Before us, the assessee has mainly sought cancellation of the order of the Ld. has mainly sought cancellation of the order of the Ld. has mainly sought cancellation of the order of the Ld. CIT(A) on the ground of the existence of (A) on the ground of the existence of a reasonable cause reasonable cause u/s M/s Sanjeev Chirania HUF M/s Sanjeev Chirania HUF 8 273B of the Act for penalty not to be imposed. The relevant for penalty not to be imposed. The relevant for penalty not to be imposed. The relevant provision of section 273B of the Act is reproduced as under: provision of section 273B of the Act is reproduced as under: provision of section 273B of the Act is reproduced as under:
“273B. Notwithstanding Notwithstanding Notwithstanding anything anything anything contained contained contained in in in the the the provisions of provisions of 20[clause (b) of sub-section (1) of] 21 21[ section 271 , section section 271A, 22 [ section 271A section 271AA,] section 271AA 271B 23[, section 271BA section 271BA], 24 [ section 271BB section 271BB,] section 271C , 25[ section 271CA , ] section section 271D, section 271D section 271F, 27 271E, 26 [ 27 [ section 271FA,] 28 [ section 271FB,] 29 [ section 271G section 271G,]] clause (c) or clause (d) of sub (c) or clause (d) of sub-section (1) or sub-section (2) section (2) of section section 272A, 272A sub-section (1) of section section 272AA] 272AA or 30 [ section 272B section 272B or] 31[sub-section (1) 32 32[or sub- section (1A)] of section (1A)] of section 272BB or] 33 [sub-section (1) section (1) of section 272BBB section 272BBB or] clause (b) of sub-section (1) or clause section (1) or clause (b) or clause (c) of sub (b) or clause (c) of sub-section (2) of section 273, no penalty , no penalty shall be imposable on the person or the assessee, as the shall be imposable on the person or the assessee, as the shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said case may be, for any failure referred to in the said case may be, for any failure referred to in the said provisions if he proves that there was reasonable provisions if he proves that there was reasonable provisions if he proves that there was reasonable cause 34 for the said failure.] for the said failure.]” 5.1 Thus in view of the above provision, if the assessee proves that Thus in view of the above provision, if the assessee proves that Thus in view of the above provision, if the assessee proves that there was a reasonable cause for the failure in non there was a reasonable cause for the failure in non- -filing the return of income then no penalty shall be imposed. Before us, the assessee of income then no penalty shall be imposed. Before us, the assessee of income then no penalty shall be imposed. Before us, the assessee d two reasonable causes. Firstly, the assessee has has cited two reasonable , the assessee has submitted that he was under bona fide belief that submitted that he was under bona fide belief that his his total income was not exceeding the minimum threshold income for the purpose the minimum threshold income for the purpose the minimum threshold income for the purpose of the Income-tax. Secondly Secondly, due to illness in the illness in the family, Karta of the HUF was out of station and therefore, he could not file the was out of station and therefore, he could not file the was out of station and therefore, he could not file the return of income. The Ld. DR could not controvert the existence of return of income. The Ld. DR could not controvert the existence of return of income. The Ld. DR could not controvert the existence of the reasonable cause in above circumstances. In our opinion there the reasonable cause in above circumstances. In our opinion the reasonable cause in above circumstances. In our opinion exists a reasonable cause for failure on the part of the assessee a reasonable cause for failure on the part of the assessee a reasonable cause for failure on the part of the assessee in filing regular return of income as prescribed u/s 139(1) of the Act. filing regular return of income as prescribed u/s 139(1) of the Act. filing regular return of income as prescribed u/s 139(1) of the Act.
M/s Sanjeev Chirania HUF M/s Sanjeev Chirania HUF 9 Accordingly, the penalty u/s 271 Accordingly, the penalty u/s 271F of the Act levied by the by the Assessing Officer and upheld by the Ld. CIT(A) and upheld by the Ld. CIT(A), is deleted. The grounds of is deleted. The grounds of appeal of the assessee are accordingly allowed. appeal of the assessee are accordingly allowed.
In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed.