Loading judgment…
Facts
The assessee failed to file income tax returns for AY 2010-11 and 2011-12, leading to penalties under Section 271F. The assessee contended being an agriculturist with no taxable income, but assessments were reopened due to cash deposits. Quantum additions made previously were set aside by the ITAT for re-adjudication by the CIT(A).
Held
The Tribunal held that the imposition of penalty under Section 271F was premature as it was not yet ascertainable whether the assessee had taxable income requiring a return filing, pending the CIT(A)'s decision on quantum additions. Consequently, the penalty orders were set aside, and the matter was restored to the Assessing Officer for reconsideration after the CIT(A)'s adjudication.
Key Issues
Whether penalty under Section 271F is leviable when the existence of taxable income necessitating a return filing is still under adjudication by the CIT(A).
Sections Cited
271F
AI-generated summary — verify with the full judgment below
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.