PRATHAPA CHANDRA MENON,AMBALAPPUZHA vs. ASSISTANT COMMISSIONER, AAYAKAR BHAWAN,ALLEPPEY
Facts
The assessee, a non-resident, failed to file an income tax return for Assessment Year 2015-16. The Assessing Officer levied a penalty of Rs. 5,000 under Section 271F, which was upheld by the CIT(A). The assessee contended having no taxable income and not receiving the statutory notices.
Held
The Tribunal found that the assessee had no taxable income and the Revenue failed to prove proper service of notices. It concluded that the non-filing and non-response were due to circumstances beyond the assessee's control, constituting a reasonable cause. Therefore, the levy of penalty under Section 271F was not justified and was accordingly deleted.
Key Issues
Whether a penalty under Section 271F for non-filing of income tax return can be sustained when the assessee had no taxable income, notices were not properly served, and reasonable cause existed for the non-compliance.
Sections Cited
271F
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Income Tax Appellate Tribunal, COCHIN
Before: HON’BLE SHRI INTURI RAMA RAO & SHRI HON’BLE MANU KUMAR GIRI
आयकर अपीलीय अ�धकरण �ायपीठ, कोचीन IN THE INCOME TAX APPELLATE TRIBUNAL, COCHIN माननीय इंटूरी रामा राव, लेखा सद� एवं माननीय �ी मनु कुमार �ग�र, �ा�यक सद� के सम� BEFORE HON’BLE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI HON’BLE MANU KUMAR GIRI, JUDICIAL MEMBER आयकर अपील सं./ ITA No.767/Coch/2025 �नधा�रण वष� /Assessment Year: 2015-16 Prathapa Chandra Menon, The Asst. Commissioner of Menon Mar Madom, Vs. Income Tax, Ambalapuzha Fast EDB.O, Alappuzha. Ambalappuzha, Alappuzha – 688 561. PAN: CMZPM 2672R (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/ Appellant by : None ��यथ� क� ओर से /Respondent by : Smt. Leena Lal, Snr A.R सुनवाई क� तार�ख/Date of Hearing : 06.11.2025 घोषणा क� तार�ख /Date of Pronouncement : 28.11.2025 आदेश / O R D E R PER MANU KUMAR GIRI (Judicial Member):
The captioned appeal filed by the assessee is directed against order of the Ld. Commissioner of Income Tax (Appeal)/NFAC, Delhi [‘CIT(A)’ in short] dated 12.09.2025 for Assessment Year 2015-16
ITA No. 767/Coch/2025 Prathapa Chandra Menon.
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confirming imposition of penalty u/s.271F of the Income tax Act,
1961 (‘Act’ in short).
The assessee has raised several grounds challenging the levy of
penalty u/s 271F. In essence, the grievance of the assessee is that
the penalty has been wrongly levied despite the fact that the
assessee had no taxable income for the relevant assessment year.
The assessee is a non-resident, and the statutory notices allegedly
issued by the AO were never received. The non-filing of return and
non-response to notices were not wilful, and were due to
circumstances beyond the assessee’s control. The penalty order
violates the principles of natural justice.
Facts of the case is that the assessee, a non-resident individual,
did not file a return of income for A.Y. 2015-16. The Assessing
Officer issued penalty proceedings u/s 271F and imposed a penalty
of Rs.5,000/- for failure to file the return within the prescribed time.
The assessee contended that he had no taxable income and that
ITA No. 767/Coch/2025 Prathapa Chandra Menon.
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the notices sent by the AO were not received. The CIT(A) upheld the
penalty.
We have carefully considered the rival submissions and perused
the record. The assessee has consistently maintained that he had
no taxable income for the year. The Revenue has not brought any
material on record to contradict this claim. When there is no taxable
income, the obligation to file return is materially diluted, and penalty
for non-filing becomes unsustainable in the facts of the case.
Further, the assessee is a non-resident, and it is plausible that
notices issued at his last known address went unnoticed. The
Revenue has not demonstrated proper service of notice. Penalty
cannot be sustained when the assessee was deprived of an
effective opportunity to comply. The non-response to notices was
due to reasons beyond the assessee’s control. There is nothing on
record to show that the default was intentional or deliberate. Penalty
u/s 271F is imposable only where failure is without reasonable
cause. In this case, reasonable cause exists. Considering the above
facts and the settled legal position that penalty cannot be levied
where there is reasonable cause, we hold that the levy of penalty u/s
ITA No. 767/Coch/2025 Prathapa Chandra Menon.
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271F in the present case is not justified. Accordingly, the penalty of Rs. 5,000 levied u/s 271F is hereby deleted.
In the result, appeal filed by the assessee is allowed.
Order pronounced on 28th day of November, 2025 at Cochin.
Sd/- Sd/- (इंटूरी रामा राव) (मनु कुमार �ग�र) (Inturi Rama Rao) (Manu Kumar Giri) लेखा सद� /Accountant Member �ा�यक सद� / Judicial Member Cochin, �दनांक/Dated: 28th November, 2025. EDN, Sr. P.S आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त/CIT, 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF
