SURESH RAMANBHAI NAIK L/H OF RAMANBHAI PARBHUBHAI DESAI,SURAT vs. INCOME TAX OFFICER, WARD 1(3)(4), SURAT

Appellant represented by Shri Suresh Kabra, CA Respondent represented by Shri J.K. Chandani, Sr.DR Date of hearing 05/05/2022 Date of pronouncement 12/07/2022 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals), Surat (in short, the ld. CIT(A) dated 01/09/2021 which in turn arises from the order of penalty levied under Section 271F of the Income Tax Act, 1961 (in short, the Act) dated 15/03/2019 for the Assessment year (AY) 2011-12. The assessee has raised following grounds of appeal: “1. The order of the Learned CIT(A) confirming the order of the Learned AO is not correct as per the law, facts, different Suresh Ramanbhai Naik Vs ITO pronouncements and for other reasons for taking the penalty of Rs. 5000 under Section 271F.

2. The Learned CIT(A) has failed to provide the opportunity to reply the notice before finalization of order. This has happened due to failure of the system.

3. The Learned CIT(A) has failed to pass the order early and not kept in abeyance till passing the order first to delete the addition 11,60,194/- (quantum appeal).

4. The order of learned CIT(A) is not valid, as it is not passed within the time prescribed as per the circular of the CBDT.

5. The appellant craves leave to amend, alter or delete any of the above grounds of appeal.”

2. Facts in brief as extracted from the orders of lower authorities are that the case of assessee for the A.Y. 2011-12 was reopened under Section 147 of the Act and notice under Section 148 dated 30/03/2018 was issued after taking necessary approval from the competent authority. In response to notice under Section 148 of the Act, the assessee filed his return of income on 25/04/2018 declaring income of Rs. 2,13,897/-. The Assessing Officer recorded that the assessee has not given any explanation/reply in respect of question raised by him during the assessment about the cash deposit in bank of Baroda. Accordingly the assessment was completed under Section 144 read with Section 147 of the Act by determining total income of Rs. 15,83,042/-. The Assessing Officer at the time of passing assessment order initiated penalty proceedings under Section 271F of the Act by taking Suresh Ramanbhai Naik Vs ITO a view that the assessee had failed to furnish return of income within due time as prescribed under the provisions of Section 139(1) of the Act. A show cause notice under Section 274 r.w.s. 271F of the Act was issued to the assessee on 30/09/2018 in fixing hearing on 18/10/2018. The assessing officer recorded that the assessee filed his reply on 10/01/2019 and furnished copy of original return of income filed on 02/10/2012 and prayed to waive the penalty proceedings. The reply of assessee was not accepted by the Assessing Officer by holding that the assessee has not filed return of income as required under sub-section (1) of Section 139 before end of the relevant assessment year. Accordingly, the Assessing Officer levied the penalty of Rs. 5,000/- under Section 271F of the Act vide his order dated 15/03/2019.

3. Aggrieved by the penalty under Section 271F, the assessee filed appeal before the ld. CIT(A), Surat. The appeal was transferred to NFAC New Delhi and was decided on 01/09/2021 by confirming the order of penalty levied by the Assessing Officer. The ld. CIT(A)/NFAC held that the intention of legislation is to encourage for filing return of income within due date and in case, there is delay, the penalty under Section 271F is mandated. Further aggrieved, the assessee has filed the present appeal before the Tribunal.

Suresh Ramanbhai Naik Vs ITO 4. We have heard the submissions of ld. authorised representative (AR) of the assessee and the ld. Senior Departmental representative (Sr. DR) for the revenue and have gone through the orders of the authorities below. The ld. AR of the assessee submits that the assessee has not filed his return of income for A.Y. 2010-11 within due date as he was under bonafide belief that he has no taxable income and is not required to file return of income. The assessee on receiving proper advice, fled original return of income on 02/10/2012 and paid tax of R. 23,183/-. The ld. AR of the assessee submits that he has already filed copy of acknowledgement of return on record which clearly shows the date of filing return of income on 02.10.2012. The assessee in response to notice under Section 148 also filed return of income. Non-filing of return of income was not intentional but due to bonafide belief that the assessee is not having any taxable income and when he realised and received advice, immediately filed return of income on 02/10/2012. The ld. AR submits that the assessee has reasonable cause within the scope of Section 273B of the Act and in such circumstances, no penalty under Section 271F is leviable. To support his submission, the ld. AR of the assessee relied on the following case laws: (i) Mrs. Manju Kataruka Vs ITO (2005) 3 SOT 414 (Kol). (ii) R.S. Investment Vs. ITO (2011) 15 taxmann.com 270 (Delhi) (iii) NHK Japan Broadcasting Corporation Vs DCIT (2006) 101 TTJ 292 (Delhi)

Suresh Ramanbhai Naik Vs ITO 5. On the other hand, the ld. Sr. DR for the revenue has vehemently supported the order of the ld. CIT(A)/NFAC.

by the assessee are allowed.

7. In the result, this appeal of the assessee is allowed. Order pronounced in the open court on 12th July, 2022 at the time of hearing of this appeal.