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Facts
The assessee failed to file his return of income for assessment years 2010-11 and 2011-12, resulting in a penalty under Section 271F. The original assessments were reopened due to cash deposits in the bank account. The ITAT had set aside the quantum addition to the file of the CIT (Appeals).
Held
The Tribunal held that since it was not ascertainable whether the assessee had taxable income requiring a return, the penalty under Section 271F was not sustainable at this stage. The matter was restored to the AO for further examination after the CIT(A) adjudicates the appeal.
Key Issues
Whether the penalty under Section 271F is leviable when the existence of taxable income, necessitating the filing of a return, is uncertain and the quantum addition has been set aside.
Sections Cited
271F, 143(3), 147, 148
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Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
आयकर अपील"य अ"धकरण,च"डीगढ़ "यायपीठ, च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ & 964/CHD/2024 "नधा"रण वष" / Assessment Year: 2010-11,2011-12 Shri Ajmer Singh, Vs The ITO, C/o Shri Tej Mohan Singh, Advocate, Ward 6(5), # 527, Sector 10-D, Chandigarh. Mohali. "थायी लेखा सं./PAN NO: CWJPS6206H अपीलाथ"/Appellant ""यथ"/Respondent Assessee by : Shri Tej Mohan Singh, Advocate Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr.DR Date of Hearing : 05.06.2025 Date of Pronouncement : 06.06.2025 PHYSICAL HEARING O R D E R PER RAJ PAL YADAV, VP The present two appeals are directed at the instance of the assessee against the separate orders of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 21.08.2024 passed for assessment year 2010-11 and 2011-12.
The solitary grievance of the assessee is that ld. CIT (Appeals) has erred in confirming the penalty imposed u/s 271F of the Income Tax Act, 1961. ITA Nos.962 & 964/CHD/2024 A.Y.2010-11 & 2011-12 2
With the assistance of ld. Representative, we have gone through the record carefully. It emerges out from the record that assessee failed to file his return of income in both these years, therefore, he has been visited with penalty of Rs.5000/- in each assessment year. The case of the assessee is that he is an agriculturist who was not required to file return of income because he has no taxable income. However, we find that both these assessments have been reopened by the AO on the ground that assessee has made deposits in cash in his bank account. The quantum addition has been set aside by the ITAT to the file of ld. CIT (Appeals) vide &1439/CHD/2019 assessment year 2010-11 and 2011-12. Thus, it is not ascertainable whether any taxable income was available in the hands of the assessee for which he was required to file a return of income. Upto and until this aspect is being decided by CIT (Appeals), assessee does not deserve to be visited with penalty u/s 271F. Therefore, we set aside both the orders and restore this issue to the file of AO. The ld. AO will explore the issue after the adjudication of appeal by the CIT (Appeals). & 964/CHD/2024 A.Y.2010-11 & 2011-12 3
In the result, both the appeals are allowed for statistical purposes.