KANHAIYA LAL LALWANI,JAIPUR vs. ITO WARD-5(1) JAIPUR, JAIPUR
In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that the assessee had a reasonable cause for not filing the return, as the capital gains would have been below the taxable limit if indexed cost of acquisition and improvement were considered. Therefore, the penalty under Section 271F was deleted.
What were the facts?
The assessee failed to file his income tax return for AY 2011-12. The AO completed the assessment ex-parte and levied a penalty of Rs. 5,000/- under Section 271F for not filing the return. The CIT(A) confirmed the penalty.
What were the issues?
Whether the penalty under Section 271F is leviable when the assessee has a reasonable cause for not filing the return of income, and whether the CIT(A) erred in confirming the penalty without considering the potential for capital gains to be below the taxable limit.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(1)Show listHide list
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- Collector, Land Acquisition v. Mst. Katiji3,926 citing167 ITR 471 · 1987 · SC
Income Tax Appellate Tribunal, JAIPUR BENCHES, ‘’SMC” JAIPUR
Before: Hon’ble SHRI SANDEEP GOSAINvk;dj vihy la-@ITA No. 95/JP/2022
ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 19-02-2021, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2011-12 wherein the assessee has raised the following ground of appeal. ‘’On the facts and in the circumstances of the case, the ld.CIT(A) has erred in confirming the penalty of Rs.5,000/- levied by the AO u/s 271F of the Act, notwithstanding the fact that the AO levied penalty without considering the written
2. KANHAYA LAL LALWANI VS ITO, WARD 5(1), JAIPUR submission filed by the assessee on 18-03-2019, in compliance of show cause notice dated 6-03-2019 while the AO had specifically mentioned in the penalty order that no compliance was made.’’ 2.1 At the outset of the hearing, the Bench observed that there is delay of 35days in filing the appeal by the assessee for which the assessee in his condonation application dated 9th March, 2022 prayed to condone the delay on the ground that the appeal was filed by the then consultant of the assessee against the penalty order passed by the AO u/s 271F who mentioned his own e-mail ID in Form No. 35 while filing the appeal before the ld. CIT(A)-2, Jaipur. The consultant neither informed the assessee regarding the receipt of above appellate order on his e-mail nor sent the appellate order passed by the ld. CIT(A), NFAC, New Delhi on 9-12-2021 to the assessee. This information of passing the order by the ld. CIT(A), NFAC, New Delhi came to the notice of the assessee on 4th March 2022. Hence, the delay took place in filing of the appeal before the Hon’ble ITAT. 2.2 On the other hand, the ld. DR opposed the application of the assessee for condondation of delay.
2.3 The Bench heard both the parties and perused the materials available on record. The Bench finds that there is a sufficient cause in late filing the appeal by the assessee in view of the decision of Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji, 167 ITR 471 observed as under:-
3 KANHAYA LAL LALWANI VS ITO, WARD 5(1), JAIPUR ‘’The Legislature has conferred power to condone delay by enacting section 5 of the Limitation Act, 1963, in order to enable the courts to do substantial justice to parties by disposing of matters on merits. The expression " sufficient cause " in section 5 is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice--that being the life-purpose of the existence of the institution of courts. A justifiably liberal approach has to be adopted on principle. "Every day's delay must be explained" does not imply a pedantic approach. The doctrine must be applied in a rational, common sense and pragmatic manner. The doctrine of equality before law demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in an evenhanded manner. There is no warrant for according a step-motherly treatment when the State is the applicant praying for condonation of delay. "When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay."
Keeping in view the present facts and circumstances of the case and the Order of the Hon’ble Supreme Court (supra), the application of the assessee for condonation of delay in filing the appeal is allowed. 3.1 Apropos solitary ground of the assesse challenging the order of the ld. CIT(A), NFAC, New Delhi in confirming the penalty of Rs.5,000/- levied by the AO u/s 271F of the Act. Brief facts of the case are that while completing the assessment ex-parte u/s 144/147 of the Act on 25-10-2018, the AO initiated penalty proceedings u/s 271F of the Act for not filing the return of income for the year under considerations. Subsequently, the AO vide order dated 19-03-2019 levied penalty of Rs.5,000/- u/s 271F of the Act on the ground that the assessee was having income from long term capital gain at Rs.6,50l,313/- on sale of 4 KANHAYA LAL LALWANI VS ITO, WARD 5(1), JAIPUR residential house property situated at Plot No. 40-A/1, Krishna Colony, Ramgarh Mode, Amer Road, Jaipur whereas the ld. AR of the submitted before us that the AO was not justified in imposing penalty u/s 271F as the assessee did not file the return of income for the year under consideration on the ground that his income was below taxable limit. However, the AO while completing the assessment ex- parte worked out the long term capital gain at Rs.6,50,313/- on the sale of residential house property without giving any benefit of indexed cost of acquisition and indexed cost of improvement being the assessment was completed ex-parte u/s 144/147 of the Act. Based on the assessment order dated 25-10-2018 of the AO, the ITO, Ward 5(1) imposed penalty vide order dated 19-03-2019 amounting to Rs. 5,000/- u/s 271F.
3.2 In first appeal, the ld. CIT(A) has dismissed the appeal of the assessee by observing as under:-
‘’I have gone through the appellant’s submission and the penalty order u/s 271F.
Regarding Ground No. (1), it is withdrawn by appellant. Hence Ground No. (1) does not require any adjudication.
Regarding Ground No. (3), it is in general nature does not require any adjudication.
Regarding Ground No. (2), it is clearly mentioned in the penalty order as below. ‘’The assessee required to file the return of income for the A.Y. 2011-12 on or before 31-07-2011 u/s 139(1) of the Income 5 KANHAYA LAL LALWANI VS ITO, WARD 5(1), JAIPUR Tax Act and therefore it had more time upto 31-03-2012 i.e. end of relevant assessment year u/s 139(4) of the Income Tax Act, 1961. Thus the assessee had deliberately avoid to file his return of income for the A.Y. 2011-12 even though having taxable income, attract the provisions of Section 271F of the I.T. Act.’’ These observations are acceptable and agreeable.
More judgments on Section 271F
- Anuragraiji Vallabhraiji Goswai, Surat vs Income Tax Officer, Ward-2(2)(1), SuratITA 643/SRT/2024[2008-09]Status: Disposed7 Oct 2026AY 2008-09
- Krunal Bharat Bha vs Ar, Ahmedabadvs.the Income Tax Officer…ITA 332/AHD/2026[2015-16]Status: Disposed30 Sept 2026AY 2015-16
- Faiz Ala Faizi, Bangalore vs I.T.O., Ward - 54(2), KolkataITA 1374/KOL/2026[2017-2018]Status: Disposed30 Sept 2026AY 2017-2018
- Imran Khan, Chandigarh vs The Commissioner of Income Tax Appeals…ITA 689/CHANDI/2026[2016-17]Status: Disposed28 Sept 2026AY 2016-17
- Imran Khan, Manimajra vs The Commissioner of Income Tax Appeals…ITA 688/CHANDI/2026[2016-17]Status: Disposed28 Sept 2026AY 2016-17
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