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Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
ORDER PER M. BALAGANESH, AM: Both the appeals filed by Assessee arises out of the separate orders of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC) Delhi, [hereinafter referred to as ‘Ld. CIT(A)’] in DIN & Order No. ITBA/NFAC/S/250/2022-23/1049778451(1) dated 15/02/2023 & 10296/2014-15 dated 15/02/2019 & DIN & Order No. & 964/Del/2023 Laxmi Kant Mishra vs. ITO ITBA/NFAC/S/250/2022-23/1048730661(1) dated 16/01/2023 against the penalty orders passed by Income Tax Officer, National Faceless Assessment Centre, Delhi (hereinafter referred to as the ‘Ld. AO’) u/ss. 271F & 271(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2012-13. Penalty u/s 271F of the Act 2. We have heard the rival submissions and perused the materials available on record. We find that the return of income for AY 2012-13 was filed by assessee on 29/03/2014 voluntarily, which is within the time limit prescribed u/s 139(4) of the Act. This return of income was accepted by the CPC u/s 143(1) of the Act on 14/11/2014. Later, the assessment was sought to be reopened by issuance of notice u/s 148 of the Act on 31/03/2019 and reassessment was completed on 25/12/2019 making addition on account of unexplained cash deposits. The Ld.AO initiated penalty proceedings u/s 271F of the Act while completing the reassessment proceedings on 25/12/2019. In this regard, it would be relevant to reproduce the provisions of section 271F of the Act as under:- "271F. Penalty for failure to furnish return of income.— If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant ITA Nos.963 & 964/Del/2023 Laxmi Kant Mishra vs. ITO assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees.".
On plain reading of provisions of section 271F of the Act reproduced supra, it could be seen that penalty u/s 271F of the Act is eligible if the assessee does not file the return of income within the due date prescribed u/s 139(1) of the Act. However, in our considered opinion, this cannot be read in isolation. This section has to be read along with main provisions for filing of return of income which is governed by sections 139(1), 139(4), 139(5) and 142(1) of the Act. Section 142(1) of the Act enables the Assessing Officer to issue notice to the assessee calling for return of income. Admittedly, no notice u/s 142(1) of the Act was issued to the assessee calling for return of income when the assessee had missed the deadline prescribed u/s 139(1) of the Act. The assessee in the instant case, as stated earlier, had voluntarily filed the return within the time limit prescribed u/s 139(4) of the Act on 29/03/2014. The penalty proceedings initiated u/s 271F of the Act in the reassessment proceedings has got no linkage at all, in view of the fact that in response to the notice issued u/s 148 of the Act, the assessee had duly filed the return of income and the same had been & 964/Del/2023 Laxmi Kant Mishra vs. ITO taken cognizance by the Ld. AO in the reassessment proceedings. In the instant case, for the delay that had occurred in the original assessment proceedings, the Ld. AO has initiated penalty u/s 271F of the Act in the reassessment proceedings. In our considered opinion, the return filed u/s 139(4) of the Act is to be construed as having been made within the time limit prescribed u/s 139(1) of the Act for all provisions of the Act except wherein the assessee is claiming carry forward losses etc. Otherwise for all practical purposes, return filed u/s 139(4) of the Act would have to be construed as return filed u/s 139 (1) of the Act only. This view of ours is further fortified by the decision of Hon’ble Bombay High Court in the case of Trustees of Tulsidas Gopalji Charitable and Chaleshwar Temple Trust vs. CIT report in 207 ITR 368.
In view of the aforesaid observations and respectfully following the judicial precedent relied upon herein above, we hold that penalty levied u/s 271F of the Act would have no legs to stand in the eyes of law in the facts and circumstances of the instant case, and accordingly directed to be deleted.
In the result, the appeal of the assessee in is allowed. Page 4 of 7 ITA Nos.963 & 964/Del/2023 Laxmi Kant Mishra vs. ITO - Penalty u/s 271(1)(b) of the Act.
We find that during the course of reassessment proceedings, the assessee had defaulted in not making his submissions before the Ld. AO in response to the notices issued u/s 142(1) of the Act, for which penalty proceedings u/s 271(1)(b) of the Act, which were initiated by the Ld. AO and penalty ultimately levied in the sum of Rs.10,000/- by the Ld. AO.
We further find that the assessee had not cooperated at all during the course of reassessment proceedings by responding to statutory notices issued u/s 142(1) of the Act. In fact, the additions were made on account of cash deposits in the sum of Rs.56,40,320/- on account of unverified cash deposits in the reassessment proceedings. Despite issuing show cause notice to the assessee, the assessee had not bothered to appear and make submissions before the Ld. AO. Hence, this is a fit case for levy of penalty u/s 271(1)(b) of the Act which has rightly been done by the Ld. AO and confirmed by the Ld. CIT(A). Hence, we do not deem it fit to interfere in the said order of the Ld. CIT(A).
ITA Nos.963 & 964/Del/2023 Laxmi Kant Mishra vs. ITO 8. In the result, the appeal of the assessee in is dismissed. 9. To sum up the appeal of the assessee in ITA No.964/Del/2023 is dismissed. Order pronounced in the open court on 21st December, 2023.