MOHMAD SALIM ABDUL KARIM MAYA,JAMNAGAR vs. THE ITO, WARD-3(5), JAMNAGAR

This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals), Jamnagar, in Appeal no. CIT(A)- Jam/513/18-19/254 vide order dated 28/05/2019 passed for the assessment year 2010-11.

The assessee has taken the following grounds of appeal:-

Brief facts of the case are that the assessee is an Individual and assessed to tax with Income Tax Officer, ward 3(5), Jamnagar. The assessee passed away on 02/01/2021. The assessee was retired and during the year under consideration assessee had undertaken some transaction in share market. No other economical activities were carried out by the assessee. The assessee had no taxable income. Therefore, the assessee had not filed any return of income. Scrutiny assessment u/s 144 r.w.s. 147 was completed on Page No 3 Mohmad Salim Abdul Karim Maya vs. ITO 19/12/2017 and the ld. A.O. determined total income at Rs. 3,01,260/- on estimate basis. Being aggrieved with the Assessing Officer, the assessee had preferred appeal with the Commissioner of Income Tax (Appeal) Jamnagar. After giving effect of CIT(A) order, income of the assessee was reduced to Rs. 1,01,260/- which was below taxable. As per appeal effect order dated 04/07/2017 there is no tax payable. Notice of demand u/s 156 of the Income Tax Act, 1961 showing NIL demand was issued to the assessee.

Before us, the Ld. Counsel for the assessee submitted that as per section 139(1) of the Income Tax Act, 1961 when there is no taxable income there is no need to file return of income. Accordingly in the instant case there is no need to file return of income. The assessee further submitted that when there is no need to file income tax return there is no room for levy penalty u/s 271F of the Income Tax Act, 1961. Thus, penalty levied u/s 271F of the Income Tax Act, 1961 has no legal legs to stand and requires to deleted. Ld. Counsel for the assessee further submitted that that penalty levied u/s 271(1)(c) of the Income Tax Act, 1961 has also been deleted by Hon'ble Commissioner of Income Tax (Appeal), Jamnagar vide order No. CIT(A)/Jam/511/18-19/254 dated 28/05/2019. In response, Ld. Departmental Representative placed reliance on the observations made in the CIT(A) order.

We have heard the rival contentions and perused the material on record. We observe that after the order passed by the Ld. CIT(A), the income of the assessee was below taxable limit. Accordingly, in the instant Page No 4 Mohmad Salim Abdul Karim Maya vs. ITO facts, there was no requirement to file return of income as well. Accordingly, in our considered view, this is a fit case for deletion of penalty under section 271F of the Act.

Accordingly, the appeal of the assessee is allowed. Penalty under section 271F of the Act is directed to be deleted.