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Facts
The assessee did not file her return of income for AY 2012-13, leading to a penalty of Rs. 5,000/- under Section 271F by the AO, which was upheld by the CIT(A). The assessee contended that her salary income was less than Rs. 5 lakhs, exempting her from filing under CBDT Notification No. 9 of 2012. Subsequent reassessment proceedings under Section 143(3) r.w.s. 147, initiated by a Section 148 notice, added Rs. 67.40 lakhs as unexplained investment, raising her total income to Rs. 70.81 lakhs.
Held
The Tribunal held that since the assessee's income from salary for AY 2012-13 was less than Rs. 5 lakhs, she was initially exempt from furnishing a return of income under Section 139(1) as per CBDT Notification No. 9 of 2012. Consequently, the penalty under Section 271F for non-furnishing of return of income was not justified, as there was no initial requirement to file, irrespective of subsequent additions during reassessment.
Key Issues
Whether penalty under section 271F for non-furnishing of return is leviable when the assessee was initially exempt from filing an original return based on a CBDT notification, despite a subsequent income addition during reassessment proceedings.
Sections Cited
271F, 139(1), 143(3), 147, 142(1), 148, 153A, 153C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD
सुनवाईक�तारीख/ Date of hearing: 14.03.2024 29.05.2024 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R
This appeal is filed by the assessee against the order of the Ld.CIT(Appeals) – NFAC, Delhi dated 25.08.2023 for the AY 2012-13 in sustaining the penalty of Rs.5,000/- u/s 271A of the Act. The assessee filed concise grounds of appeal as under: -
“1. On the facts and circumstances of the case, the learned CIT(A), NFAC, Delhi erred in confirming penalty under section 271F particularly when, the quantum appeal of the appellant is pending with CIT(A).
I.T.A.No.2980/Del/2023
2. On the facts and circumstances of the case the learned CIT(A) has also erred in confirming penalty of Rs. 5,000/- particularly when, the appellant has proved that investment in flat was made by her husband by producing his bank statements and other details and the appellant’s income was less than Rs.5,00,000/- as per CBDT Notification No.9/2012 dated February 17, 2012.”
Ld. Counsel for the assessee, at the outset, submits that the Assessing Officer levied penalty of Rs.5,000/- u/s 271F of the Act for non-furnishing of return of income by the assessee u/s 139(1) of the Act. Ld. Counsel submits that assessee is an individual deriving income from salary and during the FY 2011-12 relevant to the assessment year i.e. 2012-13 the assessee derived income from salary which was less than Rs.5 lakhs and in view of the CBDT Notification No.9 of 2012 dated 17.02.2012 an individual whose total income for the relevant AY i.e. 2012-13 does not exceed Rs.5 lakhs and consists of only income chargeable to tax under the head “salaries” and “income from other sources” by way of interest from a savings bank account not exceeding Rs.10,000/- are exempt from filing return of income. Therefore, since the assessee derived only income from salary less than Rs.5 lakhs in view of the CBDT Notification the assessee was not required to file return of income and, therefore, there is no justification in levying penalty of 2
I.T.A.No.2980/Del/2023 Rs.5,000/- u/s 271F of the Act for non-furnishing of return of income.
On the other hand, the Ld. DR supported the orders of the authorities below.
Heard rival submissions. In this case, the assessee an individual deriving income from salary did not file her return of income u/s 139(1) of the Act for the year under consideration. In response to notice u/s 148, the assessee filed her return of income on 30.04.2019 declaring income of Rs.3,41,650/- under the head “salaries”. The reassessment was completed u/s 143(3) r.w.s. 147 of the Act determining the income at Rs.70,81,650/- which includes income from salary of Rs.3,41,650/-. The AO further made an addition of Rs.67,40,000/- as unexplained investment in purchase of property. The AO passed order u/s 271F of the Act for non- furnishing of return on the ground that the assessment of the assessee was completed u/s 143(3) r.w.s. 147 of the Act by making an addition under head “unexplained investment” even though the assessee contended that she is not required to file return of income in view of the CBDT Notification no. 9 of 2012 dated 17.02.2012.
The penalty levied by the AO was sustained by the Ld.CIT(A).
I.T.A.No.2980/Del/2023
Heard both sides, perused the orders of the authorities below.
It is noticed that for the AY 2012-13 the CBDT issued following notification:
I.T.A.No.2980/Del/2023
As could be seen from the above, an individual deriving income from salaries and income from other sources and whose total income for the relevant assessment year does not exceed Rs.5 lakhs is exempt from furnishing return of income u/s 139(1) of the Act for the AY 2012-13. In the assessee’s case, the assessee is an individual deriving income from salary and did not file return of income for the AY 2012-13 u/s 139(1) of the Act as she is exempt from filing return of income. However, subsequently in response to notice u/s 148 the assessee filed return of income on 30.04.2019 declaring income of Rs.3,41,650/- under the head “income from salaries”. The contention of the assessee that she derives income from salary and is less than Rs.5 lakhs is corroborated by the action of the assessee through the return filed by the assessee in response to 148, wherein income of Rs.3,41,650/- was declared under the head “salary” which was also assessed by the AO in the reassessment proceedings. In view of the notification of the CBDT the assessee is not required to file the return of income for the AY 2012-13 as she derived only income from salary which is less than Rs.5 lakhs. Therefore, the question of levy of penalty u/s 271F of the Act for non-furnishing of return for the Ay 2012-13 does not arise. Thus, the penalty levied u/s 271F of the Act is deleted.
I.T.A.No.2980/Del/2023
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 29/05/2024