SHEEL AGARWAL,GURUGRAM vs. ITO WARD 2(3), FARIDABAD

The present appeal has been filed by assessee against the order of National Faceless Appeal Centre (NFAC), Delhi dated 30.11.2022.

Following grounds have been raised by the assessee:

On the facts & in the circumstances of the case and in law, the CIT(A) erred coding in levy of penalty u/s 271F as the Appellant was not required to file her return u/s 139(1) of the Act. 5. On the facts & in the circumstances of the case and in law, the CIT(A) erred in confirming in levy of penalty u/s 271F as the notice u/s 148 was not served to the appellant as per the stipulated conditions of rule 127 of the income tax Rules 1962. 6. On the facts & in the circumstances of the case and in law, the CIT(A) erred that the Ld. AO fails to appreciate the fact that Appellant has already filed the application u/s 249(4)(b) in form 35 of the quantum appeal that she is not liable to file ROI for the said A.Y. 7. The Lower authorities has erred both in law and on facts by framing the impugned assessment order under section 144 r.w.s. 147 of the Act, without complying the mandatory conditions of section 147 to 151 of the Income Tax Act 1961. 8. On the facts & in the circumstances of the case and in law, ld. CIT(A) has erred confirming the penalty order passed by Ld. AO by not appreciating the fact that the Appellant has exhibited reasonable cause to explain the non-applicability for filing of the returns.”

Heard the arguments of both the parties and perused the material available on record.

The order u/s 271F has been passed on 28.02.2022 levying penalty of Rs.5,000/-. Aggrieved, the assessee filed appeal before the ld. CIT(A) who passed the order on 30.11.2022. The order of the ld. CIT(A) is as under: “Penalty under section 271F is not mandatory. AO may direct to the defaulter to pay a penalty of Rs.5000/-. In this case the appellant is a senior citizen and widow aged 82. The case was done exparte under section 144 r.w.s.

The appellant has never filed return income as she is a housewife and had no taxable income. Having looked at her condition, the AO may have waived off the penalty under section 271F.”

We find that the order of the ld. CIT(A) is approbate and reprobate without any rhyme or reason.

The provisions of Section 271F reads as under: “Penalty for failure to furnish return of income 271F: 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 assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees."

The assessee is 82 years old widow and never filed return of income as she is housewife and never had taxable income. We hold that provisions u/s 271F are not attracted to the case of the assessee and hence the penalty levied is hereby obliterated.