S. NARAYANAN (HUF),KARAIKUDI vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, MYSORE

ORDER

PER BEENA PILLAI, JUDICIAL MEMBER Present appeal is been filed by assessee against order dated 18/08/2021 passed by the Ld.CIT(A)-2, Panaji, for assessment year 2016-17 on following grounds of appeal: “1. The order of the Commissioner of Income-tax(Appeals) confirming the levy of penalty under sec.271F of Rs.5000/- is contrary to law. erroneous and unsustainable on the facts of the case.

2. The CIT(A) ought to have appreciated that the order of penalty is itself is invalid as it has been passed ignoring the reply of assessee sent in response to the notice and thus dropped the proceedings.

3. The CIT(A) failed to appreciate that there was reasonable cause for delay in filing the return of income in as much as the assessee was more than 75 years of age and had to necessarily depend on his assistant for any of his work and Page 2 of the absence of that person was the reason for the delay and thus cancelled the penalty levied.

4. The CIT(A) further failed to appreciate that though the statute doesnot prescribe time limit for initiation of penalty, it ought have been done within a reasonable time and hence the notice issued 14 months after completion of assessment is untenable in law.

5. The CIT(A), in any event, ought to have seen that the returned income having been accepted, the delay in filing the return constituted a venial breach and thus applied the Supreme Court decision in Hindustan Steels (83 ITR 26) and cancelled the penalty levied on the assessee.”

2. Brief facts of the case are as under: For year under consideration assessee did not file his return of income before the due date that is 31/07/2016 or even by 31/03/2017, and subsequently, penalty was levied u/s. 271F of the Act vide order dated 05/03/2020. 2.1 Aggrieved by the order of Ld.AO, assessee preferred field before the Ld.CIT(A). The Ld.CIT(A) upheld the penalty levied of ₹ 5000 under section 271F of the Act. Aggrieved by the order of Ld.AO assessee is in appeal before us.

3. None has appeared before the Tribunal on behalf of the assessee when the matter was called. However considering the smallness of the issue said appeal has been taken up for hearing. 3.1 The Ld.DR has relied on orders passed by the authorities below. We have perused the submissions advanced by both sides in light of records placed before us. We note that assessee has filed return of income on 11/09/2017.

4. Before the Ld.CIT(A), it is submitted that the delay in filing the return was due to the old age of assessee and also that the person was looking after the accounts of the assessee had suddenly left the job. Assessee was of age 75 years as recorded in Page 3 of the impugned order. On perusal of the assessment order we note that the Ld.AO accepted the return of income filed by assessee belatedly, however has levied the penalty under section 271F amounting to ₹5000.

5. Hon'ble Bombay High Court in the case of Trustees of Tulsidas Gopalji Charitable and Chaleswar Temple Trust vs. CIT reported in (1994) 207 ITR 368 , held that the sub section (1) & (4) to section 139 of the Act have to be red together and on such reading, the inevitable conclusion is that the return made within the time specified in sub section (4) of the Act has to be considered as having made within the time prescribed in sub section (1) & sub section (2) to section 139 of the Act.

6. It is seen from the record that the assessee had no intention of not filing the return or paying the taxes due in time. It is also evident that the assessee had reasonable cause for not paying the taxes due in time and for non-filing of return in time, which was subsequently complied with delay and qualifies for taking a lenient view and has a reasonable cause for non levy of penalty u/s 271 F of Rs. 5000/-. Accordingly the grounds raised by assessee stands allowed. In the result appeal filed by assessee stands allowed. Order pronounced in open court on 28th December, 2021.