E.CHANDRAKALA,TIRUNELVELI vs. INCOME TAX OFFICER, WARD 1,, TIRUNELVELI

Aggrieved by confirmation of penalty u/s 271F for Rs.5,000/- for Assessment Year (AY) 2017-18, the assessee is in further appeal before us. Upon perusal of penalty order dated 14-01-2022 as passed by Ld. AO, it could be seen that the assessee did not file return of income by due dates either u/s 139(1) or u/s 139(4). An assessment was framed u/s 144 determining income of Rs.10 Lacs. The Ld. AO initiated penalty proceedings for non-filing of return of income and show-caused the assessee. The assessee submitted that it was in further appeal against the said assessment order. However, rejecting the same Ld. AO levied penalty of Rs.5000/-.

During appellate proceedings, the assessee submitted that she was NRI and employed in USA since January, 2016. She had no taxable income In India and therefore, did not file the return of income. The addition of Rs.10 Lacs represents cash deposited in her bank account out of past salary savings by her parents. Further, the quantum addition was in further challenge. However, Ld. CIT(A) confirmed the same. Aggrieved, the assessee is in further appeal before us.

At the time of hearing, none appeared for the assessee. The Ld. Sr. DR pleaded for dismissal of the appeal. However, from the facts, it emerges that the assessee is a salary earner and employed outside India since January, 2016. For the aforesaid reasons, the cash deposits in her bank accounts for Rs.10 Lacs has been added in her hands on best judgment basis since the assessee could not attend assessment proceedings. The same is in further challenge before Ld. CIT(A). When the only source of income is salary earned from outside India, the assessee would be under bona-fide belief that her income was below taxable limit and there was no requirement for her to file the return of income. Therefore, in our considered opinion, this is not a fit case for levy of penalty. We delete the same.

The appeal stand allowed. Order pronounced on 9th October, 2024