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/512/18-19/254 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 was 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 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 19/12/2017 and determined total income at Rs. 3,01,260/- on estimate basis. The assessing officer has also levied penalty of Rs. 10,000/- u/s 271(l)(b) of the Income Tax Act, 1961 for non-compliance of the notice issued by income tax department. Being aggrieved with the assessment order the assessee had preferred appeal with the Commissioner of Income Tax (Appeal) Jamnagar. Ld. Commissioner of Income Tax (Appeal) passed order u/s 250 of the Act. After giving effect of CIT (A) order, income of the assessee was reduced to Rs. 1,01,260/- which was below taxable. As per Page No 3 Mohmad Salim Abdul Karim Maya vs. ITO 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 during the year under consideration. The assessee was uneducated. As the assessee had no taxable income, he was not aware about procedural aspects of the notice. Moreover, he was also not knowing any tax consultant or C.A. Therefore, the assessee had given the notice to his relative for further process. However, his relative forgot to give the notice to his chartered accountant. Therefore, notice issued by income tax department was not complied. The assessee was not aware about non compliance. 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 facts, there was no requirement to file return of income as well. Also, during the period under consideration, the assessee was keeping ill health, and he subsequently passed away. Accordingly, in our considered view, this is a fit case for deletion of penalty under section 271(1) (b) of the Act.

Accordingly, the appeal of the assessee is allowed. Penalty under section 271(1) (b) of the Act is directed to be deleted.