LAXMI RATHAUR, KANNAUJ V. I.T.O. 4(2)(3), KANNAUJ

ITA 12/ALLD/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6415 (ITAT-ALLAHABAD)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 01-09-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHAILENDRA SACHAN
• Keywords: Bonafide belief; Reasonable cause
• Section: 54; 144; 142(1); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD ‘SMC’ BENCH, ALLAHABAD (THROUGH VIRTUAL COURT) BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER ITA No. 12/ALLD/2021 Assessment Year: 2017-18 Laxmi Rathaur, D/o Devi Prasad Rathaur MOH Harsh Vardhan Nagar, Post Sarai Meera, Kannauj, Uttar Pradesh PAN-BLZPR3716H v . Income Tax Officer, 4(2)(3), Kannauj, U.P. (Appellant) (Respondent) Appellant by: Sh. Shailendra Sachan, Adv Respondent by: Mr. A.K. Singh, Sr. DR Date of hearing: 07/12/2021 Date of pronouncement: 15.12.2021 O R D E R SHRI VIJAY PAL RAO, JUDICIAL MEMBER: This appeal by the assessee is directed against the order dated 11 th February, 2020 of CIT(A) (National Faceless Appeal Centre), Delhi arising from penalty order passed under section 271F for the assessment year 2017-18. The assessee has raised the following grounds. 1. “Because the CIT Appeals (National Faceless Appeal Centre) has erred on facts and in law in upholding the levy of penalty of Rs. 5,000/- under section 271F of I.T. Act, 1961, which penalty is bad in law and be deleted. 2. The assessment of the appellant has been completed under section 144 without considering the return of income filed by assessee on 09.03.2018 well before passing the assessment order ex parte under section 144.” 2. The assessee is an individual and did not file any return of income under section 139(1) of the Act. The Assessing Officer issued notice under section 142(1) on ITA No.12/ALLD/2021 Laxmi Rathaur 2 09 th March, 2018 asking the assessee to furnish the return of income. The assessment was framed under section 144 on 24.10.2019, whereby the Assessing Officer has assessed the total income at Rs. 14,37,500/- which includes cash deposits in the bank account of the assessee of Rs. 14,17,500/-. Thereafter the Assessing Officer initiated the penalty proceedings under section 271F of the Income Tax Act against the assessee for the default of not filing the return of income within the stipulated period i.e. on 31 st March, 2018. The Assessing Officer imposed the penalty of Rs. 5000/- under section 271F of the Income Tax Act, vide order dated 11 th February, 2020. The assessee challenged the action of the Assessing Officer before the CIT(A) and submitted that she has filed her return of income on 20 th October, 2019 which is not disputed by the Assessing Officer as mentioned in the penalty order passed under section 271F. The assessee further contended that the return of income filed by the assessee was before the completion of the assessment and therefore there was no default on the part of the assessee as the assessee was not having the income more than the minimum amount of taxable limit. The CIT(A) was of the view that the return of income filed by the assessee was belated and therefore, the assessee has defaulted in filing the return of income within time prescribed. Accordingly, the CIT(A) confirmed the penalty levied by the Assessing Officer under section 271F. 3. Before the Tribunal, the learned AR of the assessee has submitted that the assessee has filed her return of income declaring income of Rs. 1,52,890/- in response to the notice issued by the Assessing Officer under section 142(1) of the Act. The learned AR has further submitted that the main reason for not filing the return of income within the stipulated time i.e. upto 31 st March, 2018 is because of lack of knowledge of income tax notices and further the assessee was under the impression that her income is below the taxable limit therefore, she was not required to file the return of income. Only after consulting the tax consultants, the assessee filed the return of income declaring the income which is below the taxable slab. The learned AR has thus submitted that since the return of income of the assessee was below the ITA No.12/ALLD/2021 Laxmi Rathaur 3 tax limit, she has bonafide belief that she is not required to file any return of income. The learned AR has thus contended that the case of non filing the return of income within the stipulated time period i.e. before 31 st March, 2018 is reasonable and bonafide when the assessee’s return of income is below the taxable slab. The Assessing Officer has also not assessed any other income except the deposits in the bank accounts that too without verifying the facts and source of deposits. 4. On the other hand the learned DR has submitted that it is clear from the record that the assessee miserably failed to furnish her return of income in terms of notice issued under section 142(1) of the Income Tax Act by the end of the relevant assessment year i.e. 31 st March, 2018 despite the fact that she was statutorily and obliged to comply with the said notice regardless of quantum of her income. Further, there is huge cash deposits aggregating to Rs. 14,17,500/- made in her three saving bank accounts. The assessee herself has accepted the income from business and showing turnover at Rs. 25,28,115/- which exceeded to prescribed limit of Rs. 10 Lac and the income declared by the assessee also exceeded the prescribed limit of Rs. 1,20,000/-. Therefore, the provisions of Income Tax Act are applicable to the assessee. Even otherwise once the notice is issued under section 142(1) by the Assessing Officer asking the assessee to file her return of income the assessee cannot take an excuse of income below the taxable limit. 5. The learned DR has relied upon the orders of the authorities below. He has also relied upon the decision of Delhi Benches of the Tribunal in the case of R.S. Investment vs. Income tax-Officer 15 taxmann.com 270 as well as decision of Jaipur benches of the Tribunal in the case of Shankar Lal Kumawat vs. Income tax-Officer 125 taxmann.com 347. 6. I have considered the rival submissions as well as relevant material on record. So far as the facts leading to the initiation of the penalty proceedings under section 271F, the same are not in dispute as the assessee filed her return of income ITA No.12/ALLD/2021 Laxmi Rathaur 4 on 20 th October, 2019 which is beyond the prescribed limit of end of the assessment year i.e. 31 st March, 2018. In the case in hand, the Assessing Officer issued a notice under section 142(1) on 09.03.2018 and asked the assessee to file her return of income. In the return of income, the assessee has declared the income at Rs. 1,52,890/- which is below the taxable limit. The assessee has declared the said income from business on the turnover of Rs. 25,48,115/-. Thus, when the Assessing Officer has not found any other source of income and made the addition only on account of deposits made in the bank account which are very much covered within the amount of turnover declared by the assessee than the explanation of the assesse for not filing the return of income within the stipulated limitation due to the income below taxable limit which led the belief that assessee is not required to file the return of income is reasonable and bonafide explanation for default of belated filing of return of income. The decision relied upon by the learned DR of the assessee are even to support the case of the assessee so far as the reasonable cause for belated return. In the case of R.S. Investment vs. Income tax-Officer (supra), the Delhi Benches of the Tribunal has finally held that the assessee was not having taxable income at least in the four assessment years and was of the considered view that the affidavit of the assessee explaining the reasons not in dispute therefore, the assessee does not deserved to be visited penalty under section 271F of the Income Tax Act. As regards, the decision of Jaipur Benches of the Tribunal in the case of Shankar Lal Kumawat vs. Income tax-Officer (supra), the Tribunal has discussed the issue of deduction under section 54 of the Act which could be decided in the assessment proceedings and therefore, the assessee himself cannot take this plea for not filing the return of income because the income was eligible for deduction under section 54 of the Income Tax Act. The quantum of appeal of the assessee is still pending before the CIT(A). Accordingly, once the assessee has explained the reason for not filing the return of income within the stipulated time and the explanation of the assessee is reasonable and bona-fide, then in view of the provisions of section 273B, the penalty under ITA No.12/ALLD/2021 Laxmi Rathaur 5 section 271F is not warranted. Hence the penalty levied under section 271F is deleted. 7. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 15.12.2021 through video conferencing. Sd/- [VIJAY PAL RAO] JUDICIAL MEMBER DATED: 15/12/2021 Allahabad Sh Copy forwarded to: 1. Appellant – 2. Respondent – 3. CIT(A) , Allahabad 4. CIT 5. DR - By order Assistant Registrar