Shri Asif Nannabhai Quereshi, Ahmedabad V. The ITO, Ward-6(1)(2), Ahmedabad

ITA 1205/AHD/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6418 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 18-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Set aside
• Section: 147; 148; 139; 273B; 139(1); 13; 22

Judgement Text

आयकर अपीलीय अिधकरण, अहमदाबाद ᭠यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘’ D’’ BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT AT AHMEDABAD) BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER And SHRI WASEEM AHMED, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 1205/AHD/2019 िनधाᭅरण वषᭅ/Asstt. Year: 2011-2012 Shri Asif Nannabhai Quereshi, Prop. Shilfa Steel Traders, 45, Swasray Nagar Society, Hajibava Ni Kui, Sarkhej Road, Ahmedabad-380055. PAN: AACPQ10376P Vs. I.T.O., Ward-6(1)(2), Ahmedabad. (Applicant) (Respondent) Assessee by : Shri P.F. Jain, A.R Revenue by : Shri Purushottam Kumar, Sr.D.R सुनवाई कᳱ तारीख/Date of Hearing : 21/10/2021 घोषणा कᳱ तारीख /Date of Pronouncement: 15/12/2021 आदेश/O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-6, Ahmedabad, dated 26/04/2019 arising in the matter of penalty order passed under s. 271F of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2011-2012. ITA no.1205/AHD/2019 Asstt. Year 2011-12 2 2. The only issue raised by the assessee is that learned CIT (A) erred in confirming the penalty levied by the AO for ₹ 5,000/- under the provisions of section 271F of the Act. 3. The facts in brief are that the assessee in the present case is an individual and running his proprietary concern under the name and style of ‘Shifa Steel Traders’. The assessee failed to file his return of income in response to the notice issued under section 148 of the Act and therefore the penalty was levied by the AO for ₹ 5,000/- under the provisions of section 271F of the Act vide order dated 24 th of January 2019. 4. On appeal, the learned CIT (A) also confirmed the penalty levied by the AO under the provisions of section 271F of the Act vide order dated 26 th April 2019. 5. Being aggrieved by the order of the learned CIT (A) the assessee is in appeal before us. 6. The learned AR before us filed a paper book running from pages 1 to 22 and submitted that the assessee is a small businessman and has been filing his return of income for the last several years regularly. Likewise, the assessee for the year under consideration has filed return of income dated 18 th October 2013 which is placed on pages 10 to 13 of the paper book. It was also submitted that the assessee being uneducated was not aware of income tax provisions and thus was depending on the accountant. But the accountant failed to file income tax return in response to the notice issued under section 148 of the Act due to negligence. To this effect, the assessee has also furnished the affidavit and provided the details of the accountant along with the address in such affidavit and prayed not to levy the penalty under the provisions of section 271F of the Act. 7. On the other hand the learned DR vehemently supported the order of the authorities below. ITA no.1205/AHD/2019 Asstt. Year 2011-12 3 8. We have heard the rival contentions of both the parties and perused the materials available on record. Under section 271F of the Income-tax Act, 1961, as amended by the Finance Act, 2002 with effect from June 1, 2002, if a person required to furnish his return of income under section 139(1) or by the proviso thereto fails to furnish such return before the end of the assessment year, the Assessing Officer may impose on him a penalty of five thousand rupees. 8.1 The use of the word ‘may’ in this section also indicates that it is not mandatory but discretionary. It cannot be imposed in each and every case of default but the Assessing Officer shall issue a notice to the assessee for affording the opportunity of hearing. Thus after hearing the assessee and after considering to the circumstances of each case and also taking into consideration the provisions of section 273B which may be taken help by the assessee, the AO may come to the conclusion whether any penalty is imposable or not. The provisions of section 273B is extracted below: "273B. Penalty not to be imposed in certain cases: Notwithstanding anything contained in the provisions of [Clause (b) of sub-Section(1) of Section 271, Section 271A, Section 271AA,Section 271B, Section 271BA, Section 271BB, Section 271C, section 271CA, Section 271D, Section 271E, Section271F, Section 271FA, Section 271FAB, Section 271FB, section 271G, Section 271GA, Section 271GB, Section 271H, Section 271-I, Section 271J, clause (c) or clause (d) of sub-section (1) or sub-section(2)of section 272A, sub-section (1) of section 272AA or Section 272B or sub-section (1) or sub-section (1A) of section 272BB or sub-section (1) of Section 272BBB or clause (b) of sub-section (1) or clause (b) or clause(c) of sub- section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure.]" 8.2 In the light of the above discussion, we note that the assessee has filed the affidavit by stating that return has not filed in response to the notice issued under section 148 of the Act on account of the negligence approach of the accountant. This affidavit was not also doubted by the authorities below. Considering the above submission of the assessee, we find that there was a reasonable cause which prevented him to file the income tax return in response to the notice issued under section 148 of the Act. ITA no.1205/AHD/2019 Asstt. Year 2011-12 4 8.3 Even on merit we also note that there were 2 additions made by the AO in the assessment framed under section 147 of the Act. Firstly on account of sale of property and secondly on account of cash deposit. With respect to the sale of property the assessee before us submitted that he was the owner in the property for 1/3 share and there was no addition made by the revenue with respect to other co-owners. 8.4 The assessee likewise submitted that the deposits of cash in the bank account have already been considered in the income tax return filed under section 139 of the Act and therefore no addition is warranted. From the above submission, it appears that the ld. AR before us has made the case of the assessee arguable. Accordingly, in the interest of justice and fair play we are of the view that the penalty under the provisions of section 271F of the Act is not sustainable. Thus we set aside the finding of the learned CIT (A) with the direction to the AO to delete the penalty levied by him upon the assessee. Hence the ground of appeal of the assessee is allowed. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the Court on 15/12/2021 at Ahmedabad. Sd/- Sd/- (MAHAVIR PRASAD) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 15/12/2021 Manish