M/S SANJEEV CHIRANIA HUF, MUMBAI V. INCOME TAX OFFICER, WARD-28(3)(1) , MUMBAI

ITA 251/MUM/2023

AI Insights

The case involves M/s Sanjeev Chirania HUF, who appealed against the penalty imposed by the Assessing Officer for not filing the regular return of income for the assessment year 2015-16. The penalty was initially upheld by the Commissioner of Income-tax (Appeals) but was contested on the grounds that the assessee believed he was not required to file a return as his income was below the taxable threshold. Additionally, personal circumstances, including the illness of a family member, prevented timely filing. The Tribunal considered these factors and decided in favor of the assessee, citing the provisions of Section 273B of the Income Tax Act, which allows for non-imposition of penalties if reasonable cause is shown.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123656 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 22-03-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 24-01-2023
• Other Referred Cases: Shankar Lal Kumawat v. Income Tax Officer, CIT Vs. Triumph International Finance Limited
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief; Reasonable cause
• Section: 147; 148; 54; 144; 139; 273B; 274; 139(1); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 251/MUM/2023 Assessment Year: 2015-16 M/s Sanjeev Chirania HUF, 301, Sona Chambers, 507/509 JSS Road, Chira Bazar, Marine Lines – East, Mumbai-400 002. Vs. ITO-28(3)(1), Tower No. 6, Vashi Railway Station Commercial Complex, Vashi, Navi Mumbai-400703 PAN No. AARHS 4527 D Appellant Respondent Assessee by : Ms. Ritu Kamalkishor, AR Revenue by : Mr. Milind S. Chavan, CIT-DR Date of Hearing : 23/03/2023 Date of pronouncement : 31/03/2023 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 29.12.2022 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2015-16 in relation to levy of penalty by the Assessing Officer for non-filing of regular return of income for the year under consideration. The grounds raised by the assessee are reproduced as under: 1. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax upholding the order passed by the Ld. Assessing Officer W/s 271F of the Income Tax Act, 1961 imposing penalty of Rs 5,000/-. 2. On the facts and in the circumstances of the appellant's case and in law, the Ld.Commissioner of Income Tax (Appeals) erred in sustaining the penalty by not appreciating that the belief of the assessee that he is not under obligation to file return of income, his income for the impugned year being far below the maximum amount not chargeable to tax, constitutes re filing and hence is not liable to penalty. 2. Briefly stated, facts of the case are that the regular return of income was not filed by the assessee. Subsequently, notice u/s 148 of the Income-tax Act, 1961 (in short ‘the Act’) was 31.03.2021asking the assessee to file its return of income response the assessee filed return of income declaring total income of Rs.22,440/- on 30.04.2021. The reassessment u/s 147 of the Act was completed on 27.03.2022 wherein the total inc assessed at Rs.4,88,05,223/ Assessing Officer was of the view that the income of the assessee being more than the threshold minimum taxable income, the assessee was liable compliance of the same r.ws. 274 of the Act along with assessment order passed on 27.03.2022. After considering the submission of the assessee, he levied penalty of Rs.5,000/ further appeal before the Ld. CIT(A), the assessee submitted that he M/s Sanjeev Chirania HUF 1. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the order passed by the Ld. Assessing Officer W/s 271F of the Income Tax Act, 1961 imposing penalty of 2. On the facts and in the circumstances of the appellant's case and in law, the Ld.Commissioner of Income Tax Appeals) erred in sustaining the penalty by not appreciating that the belief of the assessee that he is not under obligation to file return of income, his income for the impugned year being far below the maximum amount not chargeable to tax, constitutes reasonable cause for non filing and hence is not liable to penalty. Briefly stated, facts of the case are that the regular return of not filed by the assessee. Subsequently, notice u/s 148 tax Act, 1961 (in short ‘the Act’) was asking the assessee to file its return of income response the assessee filed return of income declaring total income on 30.04.2021. The reassessment u/s 147 of the Act was completed on 27.03.2022 wherein the total inc assessed at Rs.4,88,05,223/-. In view of the assesse Assessing Officer was of the view that the income of the assessee being more than the threshold minimum taxable income, the liable for filing return of income and compliance of the same, he initiated penalty proceedings u/s 271F r.ws. 274 of the Act along with assessment order passed on 27.03.2022. After considering the submission of the assessee, he levied penalty of Rs.5,000/- as prescribed u/s 271F of the Act. further appeal before the Ld. CIT(A), the assessee submitted that he M/s Sanjeev Chirania HUF 2 ITA No. 251/M/2023 1. On the facts and in the circumstances of the case and in (Appeals) erred in upholding the order passed by the Ld. Assessing Officer W/s 271F of the Income Tax Act, 1961 imposing penalty of 2. On the facts and in the circumstances of the appellant's case and in law, the Ld.Commissioner of Income Tax Appeals) erred in sustaining the penalty by not appreciating that the belief of the assessee that he is not under obligation to file return of income, his income for the impugned year being far below the maximum amount not asonable cause for non- Briefly stated, facts of the case are that the regular return of not filed by the assessee. Subsequently, notice u/s 148 tax Act, 1961 (in short ‘the Act’) was issued on asking the assessee to file its return of income. In response the assessee filed return of income declaring total income on 30.04.2021. The reassessment u/s 147 of the Act was completed on 27.03.2022 wherein the total income was . In view of the assessed income, the Assessing Officer was of the view that the income of the assessee being more than the threshold minimum taxable income, the for filing return of income and for non- he initiated penalty proceedings u/s 271F r.ws. 274 of the Act along with assessment order passed on 27.03.2022. After considering the submission of the assessee, he as prescribed u/s 271F of the Act. On further appeal before the Ld. CIT(A), the assessee submitted that he was under bona fide belief that his income was not taxable which is being a reasonable cause CIT(A) however, upheld the penalty observing as unde “4.1 Further, during the Penalty proceedings, the Assessing Officer issued show cause notice u/s 274 r.w.s. 271F of the Income Tax Act dated 27.03.2022 and on 03.08.2022 to Appellant as to why an order imposing penalty us 271F of the Act should not be p non-compliance of notice issue during the assessment proceedings. In response to these show cause notices the Appellant submitted that the appellant was having bonafide belief that the income being far below taxable limit as prescribed, hence file its return of income and also appellant was under no obligation to file its return of income, which constitutes'reasonable cause. The AO, however, was not impressed with the contention of the appellant and opined that assessed at an amount, which is more than the maximum amount chargeable to tax, hence the filing of return of income was necessary and thereafter proceeded to levy penalty of Rs.5,000/ section 271F of the Act. 5. The provisions of section 271F of the Act states that penalty of Rs. 5,000/ The provision of section 271F of IT act is as below: "Penalty for failure to furnish return of income. 271F. If a person who income, as required under sub or by the provisos to that sub such return before the end of the relevant assessment year, the Assessing Officer may direct that such shall pay, by way of penalty, a sum of five thousand rupees." M/s Sanjeev Chirania HUF was under bona fide belief that his income was not taxable which is reasonable cause, the penalty might be deleted. The Ld. CIT(A) however, upheld the penalty observing as unde 4.1 Further, during the Penalty proceedings, the Assessing Officer issued show cause notice u/s 274 r.w.s. 271F of the Income Tax Act dated 27.03.2022 and on 03.08.2022 to Appellant as to why an order imposing penalty us 271F of the Act should not be passed for the compliance of notice issue during the assessment proceedings. In response to these show cause notices the Appellant submitted that the appellant was having bonafide belief that the income being far below taxable limit as prescribed, hence the appellant was not liable to file its return of income and also appellant was under no obligation to file its return of income, which constitutes'reasonable cause. The AO, however, was not impressed with the contention of the appellant and opined that the income of the assessee has been assessed at an amount, which is more than the maximum amount chargeable to tax, hence the filing of return of income was necessary and thereafter proceeded to levy penalty of Rs.5,000/- as per the provisions of 71F of the Act. 5. The provisions of section 271F of the Act states that penalty of Rs. 5,000/-for late filing of return of income. The provision of section 271F of IT act is as below: "Penalty for failure to furnish return of income. If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such shall pay, by way of penalty, a sum of five thousand M/s Sanjeev Chirania HUF 3 ITA No. 251/M/2023 was under bona fide belief that his income was not taxable which is he penalty might be deleted. The Ld. CIT(A) however, upheld the penalty observing as under: 4.1 Further, during the Penalty proceedings, the Assessing Officer issued show cause notice u/s 274 r.w.s. 271F of the Income Tax Act dated 27.03.2022 and on 03.08.2022 to Appellant as to why an order imposing assed for the compliance of notice issue during the assessment proceedings. In response to these show cause notices the Appellant submitted that the appellant was having bonafide belief that the income being far below taxable the appellant was not liable to file its return of income and also appellant was under no obligation to file its return of income, which constitutes'reasonable cause. The AO, however, was not impressed with the contention of the appellant and the income of the assessee has been assessed at an amount, which is more than the maximum amount chargeable to tax, hence the filing of return of income was necessary and thereafter proceeded as per the provisions of 5. The provisions of section 271F of the Act states that for late filing of return of income. The provision of section 271F of IT act is as below: is required to furnish a return of his section (1) of section 139 section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand 6. It is clear from bare reading of the above provision that whether or not the penalty as envisaged in Section 271F is to be imposed, is a matter to be determined by the Assessing Offic may direct such penalty to be paid and conversely, it would be correct to say, he may choose not to direct for such penalty to be paid. To determine whether the default was wilful or otherwise, the explanation offer if any by the appellant, will have to be seen and construed. Section 273B provides that no penalty shall be imposed, inter alia, u/s.271F where the assessee establishes a reasonable cause for failure referred to in said section. 7. The Appellant has op Assessment proceedingsand the assessment was made as ' Best Judgement Assessment' u/s 144 of the Act.It indicate that the Appellant had no intention of filing return of income till he was offered an opportunity in the form of notice us 148 of the Act. During the Appellate proceedings, the Appellant submitted its reply in the form of Paper book including the reply submitted before the AO against the show cause issued for levy of penalty us 271F of the Act and judicial pronounc of its contention. 7.1 In the case of Shankar Lal Kumawat v. Income Tax Officer, Ward (Jaipur - Trib.), the Hon'ble ITAT JAIPUR BENCH 'A' had held that where assessee had not filed its return of income on ground that his income did not exceed maximum non under section 54, in view of fact that assessee's total income without giving effect to provision of section 54 came to an amount which exceeded maximum amount not chargeable to tax, assessee was required to file his return of income, and the penalty under section 271F levied upon him was justified. 8. Admittedly, there was a default in terms of Section 271F and violation of clear mandate of the statutory provisions of Section 271F. The quantum of Income or the interest does not alter or influence the provisions of 271F of I.T. Act. In the cases where the appellant is able to M/s Sanjeev Chirania HUF 6. It is clear from bare reading of the above provision that whether or not the penalty as envisaged in Section 271F is to be imposed, is a matter to be determined by the Assessing Officer within the meaning of the section. He may direct such penalty to be paid and conversely, it would be correct to say, he may choose not to direct for such penalty to be paid. To determine whether the default was wilful or otherwise, the explanation offer if any by the appellant, will have to be seen and construed. Section 273B provides that no penalty shall be imposed, inter alia, u/s.271F where the assessee establishes a reasonable cause for failure referred to in said section. The Appellant has opted to remain silent during the Assessment proceedingsand the assessment was made as ' Best Judgement Assessment' u/s 144 of the Act.It indicate that the Appellant had no intention of filing return of income till he was offered an opportunity in the f notice us 148 of the Act. During the Appellate proceedings, the Appellant submitted its reply in the form of Paper book including the reply submitted before the AO against the show cause issued for levy of penalty us 271F of the Act and judicial pronouncements in support of its contention. 7.1 In the case of Shankar Lal Kumawat v. Income Tax Officer, Ward-7(2), Jaipur,[2021] 125 taxmann.com 347 Trib.), the Hon'ble ITAT JAIPUR BENCH 'A' had held that where assessee had not filed its return of ome on ground that his income did not exceed maximum non-taxable amount as his income was exempt under section 54, in view of fact that assessee's total income without giving effect to provision of section 54 came to an amount which exceeded maximum amount not chargeable to tax, assessee was required to file his return of income, and the penalty under section 271F levied upon him was justified. 8. Admittedly, there was a default in terms of Section 271F and violation of clear mandate of the statutory ions of Section 271F. The quantum of Income or the interest does not alter or influence the provisions of 271F of I.T. Act. In the cases where the appellant is able to M/s Sanjeev Chirania HUF 4 ITA No. 251/M/2023 6. It is clear from bare reading of the above provision that whether or not the penalty as envisaged in Section 271F is to be imposed, is a matter to be determined by the er within the meaning of the section. He may direct such penalty to be paid and conversely, it would be correct to say, he may choose not to direct for such penalty to be paid. To determine whether the default was wilful or otherwise, the explanation offered, if any by the appellant, will have to be seen and construed. Section 273B provides that no penalty shall be imposed, inter alia, u/s.271F where the assessee establishes a reasonable cause for failure referred to in ted to remain silent during the Assessment proceedingsand the assessment was made as ' Best Judgement Assessment' u/s 144 of the Act.It indicate that the Appellant had no intention of filing return of income till he was offered an opportunity in the f notice us 148 of the Act. During the Appellate proceedings, the Appellant submitted its reply in the form of Paper book including the reply submitted before the AO against the show cause issued for levy of penalty us ements in support 7.1 In the case of Shankar Lal Kumawat v. Income Tax 7(2), Jaipur,[2021] 125 taxmann.com 347 Trib.), the Hon'ble ITAT JAIPUR BENCH 'A' had held that where assessee had not filed its return of ome on ground that his income did not exceed taxable amount as his income was exempt under section 54, in view of fact that assessee's total income without giving effect to provision of section 54 came to an amount which exceeded maximum amount not chargeable to tax, assessee was required to file his return of income, and the penalty under section 271F 8. Admittedly, there was a default in terms of Section 271F and violation of clear mandate of the statutory ions of Section 271F. The quantum of Income or the interest does not alter or influence the provisions of 271F of I.T. Act. In the cases where the appellant is able to show or prove any reasonable cause for not furnishing the return of income by 31st March assessment year, the provisions of Section 271F are not automatically imposed for late filing of the return. Section 273B of IT Act also comes to the rescue in the cases where the delay in filing of return is due to reasonable cause. Howev appellant has not submitted any reasonable cause for not filing the return of income for the A.Y. 2015 spite of having taxable income for the relevant assessment year, which was subsequently assessed in the hands of appellant. The plea that the income was below the taxable limit was never put to test during the assessment proceedings where the appellant remained non responsive. 9. In view of the above discussion and considering the totality of the facts, I a penalty order passed us 271F of the I.T. Act by the AO on account of failure for furnishing the retune of income for the A.Y. 2015 cause to prove for the same. Hence, it was a fit case imposition of penalty under Section 271F. The penalty imposed under Section 271Fof I.T. Act is hereby confirmed.” 3. Before us, the Ld. Counsel of the assessee vehemently argued on the issue of reasonable cause for non The relevant submission of the assessee “6. On the facts and in the circumstances of the case and in law, the Commissioner of Income Tax (Appeals) erred in upholding the order passed by the Assessing Officer w/s 271F of the Income Tax A penalty of Rs 5,000/ belief of the appellant that it was not under an obligation to file return of income as per the provisions of Income Tax Act, 1961 as its income for the captioned assessment year being fa amount not chargeable to tax, constitutes reasonable cause for non M/s Sanjeev Chirania HUF show or prove any reasonable cause for not furnishing the return of income by 31st March of the relevant assessment year, the provisions of Section 271F are not automatically imposed for late filing of the return. Section 273B of IT Act also comes to the rescue in the cases where the delay in filing of return is due to reasonable cause. However, it is evident from the records that the appellant has not submitted any reasonable cause for not filing the return of income for the A.Y. 2015 spite of having taxable income for the relevant assessment year, which was subsequently assessed in hands of appellant. The plea that the income was below the taxable limit was never put to test during the assessment proceedings where the appellant remained non responsive. 9. In view of the above discussion and considering the totality of the facts, I am of the considered view that the penalty order passed us 271F of the I.T. Act by the AO on account of failure for furnishing the retune of income for the A.Y. 2015-16 and also not having any reasonable cause to prove for the same. Hence, it was a fit case imposition of penalty under Section 271F. The penalty imposed under Section 271Fof I.T. Act is hereby Before us, the Ld. Counsel of the assessee vehemently argued on the issue of reasonable cause for non-filing of return of income. relevant submission of the assessee is reproduced as under: On the facts and in the circumstances of the case and in law, the Commissioner of Income Tax (Appeals) erred in upholding the order passed by the Assessing Officer w/s 271F of the Income Tax Act, 1961 imposing penalty of Rs 5,000/- by not appreciating that the belief of the appellant that it was not under an obligation to file return of income as per the provisions of Income Tax Act, 1961 as its income for the captioned assessment year being far below the maximum amount not chargeable to tax, constitutes reasonable cause for non-filing and hence is not liable to penalty. M/s Sanjeev Chirania HUF 5 ITA No. 251/M/2023 show or prove any reasonable cause for not furnishing of the relevant assessment year, the provisions of Section 271F are not automatically imposed for late filing of the return. Section 273B of IT Act also comes to the rescue in the cases where the delay in filing of return is due to reasonable er, it is evident from the records that the appellant has not submitted any reasonable cause for not filing the return of income for the A.Y. 2015-16 in spite of having taxable income for the relevant assessment year, which was subsequently assessed in hands of appellant. The plea that the income was below the taxable limit was never put to test during the assessment proceedings where the appellant remained 9. In view of the above discussion and considering the m of the considered view that the penalty order passed us 271F of the I.T. Act by the AO on account of failure for furnishing the retune of income for 16 and also not having any reasonable cause to prove for the same. Hence, it was a fit case for imposition of penalty under Section 271F. The penalty imposed under Section 271Fof I.T. Act is hereby Before us, the Ld. Counsel of the assessee vehemently argued filing of return of income. reproduced as under: On the facts and in the circumstances of the case and in law, the Commissioner of Income Tax (Appeals) erred in upholding the order passed by the Assessing ct, 1961 imposing by not appreciating that the belief of the appellant that it was not under an obligation to file return of income as per the provisions of Income Tax Act, 1961 as its income for the captioned r below the maximum amount not chargeable to tax, constitutes reasonable filing and hence is not liable to penalty. 7. Besides, it is humbly submitted before your honour that the father of Karta of appellant, who is 67 years old is a patient period he was afflicted with acute breathlessness rendering him incapacitated to look after his own needs. Under these stressful circumstances, the Karta of appellant was forced to leave station and be with his father wh state of Rajasthan. The village does not have the kind of facilities that are available in cities and this necessitated the Karta of appellant staying with his father in fulfillment of his filial duties. Since fat condition was not getting better, the Karta of appellant brought his father to the city for better medical care and expert consultation. During the period under consideration, the spouse of Karta of appellant being in the family way also required due Subsequently the grandfather succumbed to his illness rendering the Karta of appellant unable to attend to his daily affairs. 8. As held by the Hon'ble High Court of Bombay in CIT Vs. Triumph International FinanceLimited [2012] 345 IT 270, in view of the provisions of 273B, if reasonable cause exists, no penalty is leviable. The reasons for the failure to file returns within the stipulated time was bonafide and genuine. In this context, reference is made to the observations of the Hon'ble Court in the judgement cited above; "The expression 'reasonable cause' used in Section273B is not defined under the Act. Unlike the expression 'sufficient cause' used in Section 249(3), 253(5) and 260A(2A) of the Act, the legislature has used the expression 'reasonable cause' in Section 273B of the Act. A cause which is reasonable may not be a sufficient cause. Thus, the expression'reasonable cause would have wider connotationthan the expression 'sufficient cause'. Therefore, the expression 'reasonable cause' in Section 273B for non of penalty under Section 271 E would have to be construed liberally depending upon the facts of each case." M/s Sanjeev Chirania HUF 7. Besides, it is humbly submitted before your honour that the father of Karta of appellant, who is 67 years old is a patient of acute asthma and during the said period he was afflicted with acute breathlessness rendering him incapacitated to look after his own needs. Under these stressful circumstances, the Karta of appellant was forced to leave station and be with his father who lives alone in the remote village in the state of Rajasthan. The village does not have the kind of facilities that are available in cities and this necessitated the Karta of appellant staying with his father in fulfillment of his filial duties. Since fat condition was not getting better, the Karta of appellant brought his father to the city for better medical care and expert consultation. During the period under consideration, the spouse of Karta of appellant being in the family way also required due care & attention. Subsequently the grandfather succumbed to his illness rendering the Karta of appellant unable to attend to his daily affairs. 8. As held by the Hon'ble High Court of Bombay in CIT Vs. Triumph International FinanceLimited [2012] 345 0, in view of the provisions of 273B, if reasonable cause exists, no penalty is leviable. The reasons for the failure to file returns within the stipulated time was bonafide and genuine. In this context, reference is made to the observations of the Hon'ble Bombay High Court in the judgement cited above; "The expression 'reasonable cause' used in Section273B is not defined under the Act. Unlike the expression 'sufficient cause' used in Section 249(3), 253(5) and 260A(2A) of the Act, the legislature has the expression 'reasonable cause' in Section 273B of the Act. A cause which is reasonable may not be a sufficient cause. Thus, the expression'reasonable cause would have wider connotationthan the expression 'sufficient cause'. Therefore, the expression asonable cause' in Section 273B for non-imposition of penalty under Section 271 E would have to be construed liberally depending upon the facts of each M/s Sanjeev Chirania HUF 6 ITA No. 251/M/2023 7. Besides, it is humbly submitted before your honour that the father of Karta of appellant, who is 67 years of acute asthma and during the said period he was afflicted with acute breathlessness rendering him incapacitated to look after his own needs. Under these stressful circumstances, the Karta of appellant was forced to leave station and be with o lives alone in the remote village in the state of Rajasthan. The village does not have the kind of facilities that are available in cities and this necessitated the Karta of appellant staying with his father in fulfillment of his filial duties. Since fathers' condition was not getting better, the Karta of appellant brought his father to the city for better medical care and expert consultation. During the period under consideration, the spouse of Karta of appellant being in care & attention. Subsequently the grandfather succumbed to his illness rendering the Karta of appellant unable to attend to his 8. As held by the Hon'ble High Court of Bombay in CIT Vs. Triumph International FinanceLimited [2012] 345 0, in view of the provisions of 273B, if reasonable cause exists, no penalty is leviable. The reasons for the failure to file returns within the stipulated time was bonafide and genuine. In this context, reference is Bombay High "The expression 'reasonable cause' used in Section273B is not defined under the Act. Unlike the expression 'sufficient cause' used in Section 249(3), 253(5) and 260A(2A) of the Act, the legislature has the expression 'reasonable cause' in Section 273B of the Act. A cause which is reasonable may not be a sufficient cause. Thus, the expression'reasonable cause would have wider connotationthan the expression 'sufficient cause'. Therefore, the expression imposition of penalty under Section 271 E would have to be construed liberally depending upon the facts of each The jurisdictional High Court has laid down that the legislature has deliberately used the expres 'reasonable cause' and not 'sufficient cause in section 273 B of the Income Tax Act, 1961 thereby construing that the said provision of section 273B has to be given liberal interpretation 9. It has been held that levying of penalty w/s 271F is not sustainable as per law as laid down in a catena of judgments as listed below: a. MrsManiuKataruka vs Income Tax Officer (ITA No: 94 TTJ Kol 873) b. Sanjay Srivastava, Ghaziabad vs Income Tax Officer (ITA No: 4348 to 4350/Del/2010) c. R S Investment, New Del No: 1338 to 1343/Del/2011) d. M/s Hubli Dharwad Stock Trading House vs Dy. Commissioner of Income Tax, Circle No: 891 to 902/Bang/2017) e. Hon'ble High Court of Bombay in CIT Vs. Triumph International Finance L 4. On contrary, the Ld. Departmental Representative (DR) supported the order of the lower authorities and submitted that for non-filing the regular return of income, the assessee is penalty of Rs.5,000/- 5. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. Before us, the assessee has mainly sought cancellation of the order of the Ld. CIT(A) on the ground of the existence of M/s Sanjeev Chirania HUF The jurisdictional High Court has laid down that the legislature has deliberately used the expres 'reasonable cause' and not 'sufficient cause in section 273 B of the Income Tax Act, 1961 thereby construing that the said provision of section 273B has to be given liberal interpretation. 9. It has been held that levying of penalty w/s 271F is stainable as per law as laid down in a catena of judgments as listed below:- a. MrsManiuKataruka vs Income Tax Officer (ITA No: 94 TTJ Kol 873) b. Sanjay Srivastava, Ghaziabad vs Income Tax Officer (ITA No: 4348 to 4350/Del/2010) c. R S Investment, New Delhi vs ITO Ward - 30(2) (ITA No: 1338 to 1343/Del/2011) d. M/s Hubli Dharwad Stock Trading House vs Dy. Commissioner of Income Tax, Circle- 1(1), Hubli (ITA No: 891 to 902/Bang/2017) e. Hon'ble High Court of Bombay in CIT Vs. Triumph International Finance Limited[2012] 345 ITR 270.” On contrary, the Ld. Departmental Representative (DR) supported the order of the lower authorities and submitted that for filing the regular return of income, the assessee is - levied u/s 274F of the Act. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. Before us, the has mainly sought cancellation of the order of the Ld. (A) on the ground of the existence of a reasonable cause M/s Sanjeev Chirania HUF 7 ITA No. 251/M/2023 The jurisdictional High Court has laid down that the legislature has deliberately used the expression 'reasonable cause' and not 'sufficient cause in section 273 B of the Income Tax Act, 1961 thereby construing that the said provision of section 273B has to be given 9. It has been held that levying of penalty w/s 271F is stainable as per law as laid down in a catena of a. MrsManiuKataruka vs Income Tax Officer (ITA No: b. Sanjay Srivastava, Ghaziabad vs Income Tax Officer 30(2) (ITA d. M/s Hubli Dharwad Stock Trading House vs Dy. 1(1), Hubli (ITA e. Hon'ble High Court of Bombay in CIT Vs. Triumph .” On contrary, the Ld. Departmental Representative (DR) supported the order of the lower authorities and submitted that for filing the regular return of income, the assessee is liable for We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. Before us, the has mainly sought cancellation of the order of the Ld. reasonable cause u/s 273B of the Act for penalty not to be imposed. The relevant provision of section 273B of the Act is reproduced as under: “273B. Notwithstanding anything contained in the provisions of 271 , section 271A 271B 23[, section 271BA 271C , 25[ 271E, 26 [ 271FA,] 28 (c) or clause (d) of sub of section 272A or 30 [ section 272B section (1A)] of of section 272BBB (b) or clause (c) of sub 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 34 for the said failure.] 5.1 Thus in view of the above provision, if the assessee proves that there was a reasonable cause for the failure in non of income then no penalty shall be imposed. Before us, the assessee has cited two reasonable submitted that he was under bona fide belief that was not exceeding the minimum threshold income for the purpose of the Income-tax. Secondly the HUF was out of station and therefore, he could not file the return of income. The Ld. DR could not controvert the existence of the reasonable cause in above circumstances. In our opinion exists a reasonable cause for failure on the part of the assessee filing regular return of income as prescribed u/s 139(1) of the Act. M/s Sanjeev Chirania HUF for penalty not to be imposed. The relevant provision of section 273B of the Act is reproduced as under: Notwithstanding anything contained in the provisions of 20[clause (b) of sub-section (1) of] 21 section 271A, 22 [ section 271AA section 271BA], 24 [ section 271BB section 271CA , ] section 271D section 271F, 27 [ section 271FB,] 29 [ section 271G (c) or clause (d) of sub-section (1) or sub-section (2) section 272A, sub-section (1) of section 272AA section 272B or] 31[sub-section (1) 32 section (1A)] of section 272BB or] 33 [sub-section (1) 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 for the said failure.]” Thus in view of the above provision, if the assessee proves that there was a reasonable cause for the failure in non- of income then no penalty shall be imposed. Before us, the assessee d two reasonable causes. Firstly, the assessee has submitted that he was under bona fide belief that his the minimum threshold income for the purpose Secondly, due to illness in the was out of station and therefore, he could not file the return of income. The Ld. DR could not controvert the existence of the reasonable cause in above circumstances. In our opinion a reasonable cause for failure on the part of the assessee filing regular return of income as prescribed u/s 139(1) of the Act. M/s Sanjeev Chirania HUF 8 ITA No. 251/M/2023 for penalty not to be imposed. The relevant provision of section 273B of the Act is reproduced as under: Notwithstanding anything contained in the 21[ section section 271AA,] section section 271BB,] section section 271D, section 27 [ section section 271G,]] clause section (2) section 272AA] 32[or sub- section (1) section (1) or clause , 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 Thus in view of the above provision, if the assessee proves that -filing the return of income then no penalty shall be imposed. Before us, the assessee , the assessee has his total income the minimum threshold income for the purpose illness in the family, Karta of was out of station and therefore, he could not file the return of income. The Ld. DR could not controvert the existence of the reasonable cause in above circumstances. In our opinion there a reasonable cause for failure on the part of the assessee in filing regular return of income as prescribed u/s 139(1) of the Act. Accordingly, the penalty u/s 271 Officer and upheld by the Ld. CIT(A) appeal of the assessee are accordingly allowed. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 31/03/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// M/s Sanjeev Chirania HUF Accordingly, the penalty u/s 271F of the Act levied by the and upheld by the Ld. CIT(A), is deleted. The grounds of appeal of the assessee are accordingly allowed. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 31/03/2023. Sd/ SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai M/s Sanjeev Chirania HUF 9 ITA No. 251/M/2023 by the Assessing is deleted. The grounds of In the result, the appeal of the assessee is allowed. 03/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Original dictation pad the end of file 1. Draft dictated on: 2. Draft placed before author: 3. Draft proposed & placed before the second member: 4. Draft discussed/approved by Second Member: 5. Approved Draft comes to the Sr. PS/PS: 6. Order pronounced on: 7. File sent to the Bench Clerk: 8. Date on which file goes to the Head Clerk: 9. Date on which file goes to AR M/s Sanjeev Chirania HUF Date Initials Original dictation pad is enclosed at Draft dictated on: 31.03.2023 Draft placed before author: 31.03.2023 Draft proposed & placed before the Draft discussed/approved by Second Approved Draft comes to the Sr. Order pronounced on: File sent to the Bench Clerk: Date on which file goes to the Head Date on which file goes to AR M/s Sanjeev Chirania HUF 10 ITA No. 251/M/2023 Sr. PS/PS Sr. PS/PS JM/AM JM/AM Sr. PS/PS Sr. PS/PS Sr. PS/PS