Delay Beyond Assessee's Control in E-verification/Filing Belated Return: ITAT deletes Penalty Levied u/s 271F [Read Order]

The Income Tax Appellate Tribunal (ITAT), Chennai Bench, has recently, in an appeal filed before it, while deleting a penalty levied under Section 271F, on account of a delay in E-verification/ filing belated return due to reasons beyond the assessee’s control, deleted penalty levied under Section 271F.

The aforesaid observation was made by the Chennai ITAT, when an appeal was preferred before it by the assessee, as against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi, dated 20.01.2023, relevant to the assessment year 2014-15, passed under Section 271F of the Income Tax Act, 1961.

The brief facts of the case were that in the case of the assessee, the assessment was completed under Section 147/144 of the Income Tax Act, dated 21.09.2021.

The assessee was liable to file his return of income under Section 139(1) of the Income Tax Act. However, since the assessee had violated the provisions of sub section (1) of the Section 139 of the Income Tax Act by not filing the return of income within the time limit, the Assessing Officer levied penalty of ₹5,000/- under section 271F of the Act.

On appeal, the CIT(A) confirmed the penalty levied under Section 271F of the Income Tax Act and it is being aggrieved by the same, that the assessee is presently in appeal before the Tribunal.

With Shri G. Gopalan, IRS Retd. JCIT, on behalf of the assessee, having submitted by that the assessee was prevented by reasonable cause for not doing the E -verification of the return filed on 30.09.2014, and that the delay is neither wilful nor wanton, he prayed for deleting the penalty levied under Section 271F of the Act.

On the other hand, Shri AR V Sreenivasan, the Addl. CIT, supported the orders of authorities below.

Hearing the opposing contentions of both sides, and thereby perusing the materials on record, the ITAT observed:

“We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Since the assessee could not file his return of income under section 139(1) of the Act, the Assessing Officer issued notice under section 274 r.w.s. 271F of the Act. There was no response from the assessee against the penalty notice. Since, the assessee failed to file his return of income under section 139(1) of the Act, the Assessing Officer levied penalty of

₹. 5,000/- under section 271F of the Act, which was confirmed by the ld. CIT(A).”

“The case of the assessee is that the assessee filed his return of income for the assessment year 2014-15 on 30.09.2014 through his representative Mr. V. Ramakrishnan, CA and after few days he fell in sick, hospitalized and thereafter he expired on 17.11.2014. Copy of the death certificate was brought on record. The assessee was under bonafide belief that the CA would have filed E-verification. Only after service of notice under section 148 of the Income Tax Act, the assessee came to know that E-verification was not done while filing the return of income on 30.09.2014. Thereafter in response to the notice under section 148 of the Income Tax Act, the assessee once again filed the return. Since the delay in doing E-verification/filing belated return is neither wilful nor wanton and the assessee was prevented by reasonable cause, we are of the considered opinion that the penalty of ₹.5,000/- is not liable to be levied under section 271F of the Income Tax Act”, the Coram of Manoj Kumar Aggarwal, the Accountant Member, and  V. Durga Rao, the Judicial Member, added.

Thus, the Chennai ITAT held:

“Accordingly, the penalty levied under section 271F of the Act is deleted. In the result, the appeal filed by the assessee is allowed.”

To Read the full text of the Order CLICK HERE

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