The Income Tax Appellate Tribunal (ITAT) Delhi Bench recently quashed the penalty imposed under Section 271F of Income Tax Act, 1961 against 82-year-old widow due to non-filing of Income Tax Return (ITR).
The Assesee, Sheel Agarwal is a senior citizen and widow aged 82, filed the appeal before the tribunal against the order of National Faceless Appeal Centre (NFAC).
The assessment of the assessee’s case was carried out exparte under the provisions of Section 144 read with Section 147 of the Income Tax Act. The appellant, being a housewife with no taxable income, had never filed an income tax return. Aggrieved with the exparte order, the assessee lodged an appeal before the Commissioner of Income Tax Appeals (CIT(A).
The tribunal observed the ruling of the CIT(A) that “Penalty under section 271F is not mandatory. AO may direct 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. 147. 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.”
When the matter was considered before the tribunal, the bench upheld the order of the Commissioner of Income Tax Appeals.
The bench noted that the taxpayer is an 82-year-old widow who has never filed an income tax return, as she is a homemaker and has never earned taxable income. It was ruled that the provisions of Section 271F of the Income Tax Act do not apply to the taxpayer’s situation, and therefore, no penalty should be imposed.
The tribunal after reviewing the facts and submissions of the both parties the Two-member bench of Dr. B. R. R. Kumar (Accountant Member) and C. M. Garg (Judicial Member) allowed the appeal filed by the assessee.
Shikhar Garg,counsel appeared for the Assessee. Ravi Kant Choudhary, appeared for the revenue during the proceedings.
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