The Income Tax Appellate Tribunal (ITAT), Mumbai bench, while upholding a penalty order passed under section 271F of the Income Tax Act, 1961 held that the declaration of income under the Income Declaration Scheme, 2016 cannot be treated as a ‘reasonable cause’ for non-filing of Income Tax Return.
The brief facts of the case are that the assessee did not file her return of income for the assessment year under consideration. As per ITS information in NMS module the assessing officer noticed that the assessee had made time deposits of Rs.2,60,00,000/- in bank, acquired mutual fund of Rs.4,00,000/- and earned interest income of Rs.51,61,467/- during the financial year relevant to the assessment year under consideration. Consequently, the Assessing Officer levied penalty under section 271F of the Act.
The assessee submitted that assessee had declared in IDS-26 and filed copy of working of taxes in respect of IDS-2016 (assessment year-wise and installment-wise). Except this, the assessee failed to furnish any other details.
After considering arguments from both the sides, the bench comprising of Shri Pavan Kumar Gadale (Judicial Member) and Shri Gagan Goyal (Accountant Member) observed that the claim of the assessee that she has declared income under the IDS 2016 cannot be a tenable explanation as the declaration was not supported by payment of due taxes on the income declared and, therefore, it was an invalid declaration.
Upholding the penalty order, the Tribunal held that “No other reasonable cause for not filing the return of income is brought to our attention. Therefore, we are of the considered opinion that the authorities below were justified in upholding the levy of penalty under section 271F. We uphold the decision of the NFAC.”
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