Delay in Filing Income Tax Return under Bona fide belief that No Taxable Income: ITAT deletes Penalty u/s 271F [Read Order]

The Income Tax Appellate Tribunal (ITAT), Surat Bench presided by Pawan Singh, Judicial Member, and Dr. Arjun Lal Saini, Accountant Member has held that delay in filing Income Tax Return under bona fide belief that no taxable income and deletes penalty u/s 271F.

The appellant, Suresh Ramanbhai Naik’s case was reopened under section 147, and the assessment was completed under section 144 by determining a total income of Rs. 15,83,042/-. The Assessing Officer imposed a penalty of Rs. 5000/- under Section 271F of the Act alleging that the appellant had failed to furnish the return of income within due time as prescribed under the provisions of Section 139(1) of the Act.

Aggrieved by the penalty the appellant filed an appeal before the CIT(A) and the appeal was transferred to NFAC New Delhi and was decided by confirming the order of penalty levied. The aggrieved, the appellant has filed an appeal before the Tribunal.

The counsel for the appellant submitted that the appellant has not filed his return of income for A.Y. 2010-11 within the due date as he was under bonafide belief that he has no taxable income and is not required to file a return of incomeand when he realised and received advice, immediately filed return of income on 02/10/2012. The appellant has reasonable cause within the scope of Section 273B of the Act and in such circumstances, no penalty under Section 271F is leviable.

The Authority observed that the assessee filed a return of income, though it was filed belatedly. The assessee has a reasonable cause for not filing the return of income on the pretext that he is not having taxable income. The Authority thus held that “the assessee has shown reasonable cause for not filing the return of income before the due date of return. Therefore, we direct the Assessing Officer to delete the penalty levied under Section 271F of the Act”.

Mr. Suresh Kabra, CA,and Mr. J.K. Chandani appeared on behalf of the appellant and respondent.

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