Sh. Sabjeet Singh Sohi, Chandigarh V. ITO Ward 5 (5), Chandigarh

ITA 698/CHANDI/2022

AI Insights

The case involves Sabjeet Singh Sohi, a non-resident Indian residing in Canada, who appealed against the penalty imposed by the National Faceless Appeal Centre (NFAC), Delhi, for not filing a valid return of income for the Assessment Year 2013-14. The penalty was initially imposed by the Assessing Officer under section 271F of the Income Tax Act, 1961, after the assessee failed to e-verify his return due to not receiving an OTP on his overseas mobile number and the non-acknowledgment of the ITR-V sent by post from Canada. The ITAT found that these circumstances constituted a reasonable cause for the assessee's inability to comply with the e-verification requirement, leading to the allowance of his appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128429 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-03-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 20-11-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 148

Judgement Text

आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ,चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, “SMC”, CHANDIGARH BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER & SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No.698/CHD/2022 Ǔनधा[रणवष[ / Assessment Year :2013-14 Sabjeet Singh Sohi, 609, Sector 33-B, Chandigarh बनाम The ITO, Ward-5(5), Chandigarh èथायीलेखासं./PAN NO: ACLPS1194A अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Ǔनधा[ǐरतीकȧओरसे/Assessee by :None राजèवकȧओरसे/ Revenue by : Sh. M.P. Dwivedi, Sr. DR स ु नवाईकȧतारȣख/Date of Hearing :23.03.2023 उदघोषणाकȧतारȣख/Date of Pronouncement : 06.06.2023 आदेश/Order Per Sudhanshu Srivastava, Judicial Member: This appeal is preferred by the assessee against the order dated 13.10.2022 passed by the National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2013-14, wherein, vide the impugned order, the NFAC has affirmed the imposition of penalty of Rs.5,000/- imposed u/s. 271F of the Income Tax Act, 1961 (hereinafter called ‘the Act’). 2. None was present on behalf of the assessee-appellant when the appeal was called out for hearing nor was any adjournment application in this regard placed before us. ITA No. 698-Chd-2022 (A.Y. 2013-14) - Sh. Sabjeet Singh Sohi, Chandigarh 2 However, looking in to the facts of the case, we deem it appropriate to proceed with the hearing of the appeal ex- parte qua the assessee-appellant. 3. The brief facts of the case are that as per AIR/CIB/26AS information available, it was observed that the assessee had made time deposits of Rs.30,00,000/- and remitted Rs.11,00,000/- to a non-resident during the Financial Year 2012-13 relevant to Assessment Year 2013- 14. Besides, the assessee had also earned pension income of Rs.5,32,441/- and interest income of Rs.92,523/-. Since the assessee had not filed the return of income for the relevant assessment year, proceedings u/s. 147 of the Act were initiated in this case and the assessment was completed in terms of Section 147 r.w.s. 144 of the Act at an income of Rs.48,18,810/-. 4. Subsequently, a notice u/s. 148 of the Act was issued to the assessee and in response to said notice, the assessee filed the return of income but the same was treated as invalid, since the assessee had not sent the ITR-V to Central Processing Centre or e-verified the return of income. Subsequently, penalty proceedings u/s.271F of the Act were initiated and the assessee was asked to explain why penalty u/s.271F of the Act may not be imposed. In response, it was ITA No. 698-Chd-2022 (A.Y. 2013-14) - Sh. Sabjeet Singh Sohi, Chandigarh 3 the assessee’s submission that the assessee was a non resident living in Canada for the almost last two decades and it was also submitted that the assessee had duly filed his return of income in response to the notice issued u/s.148 of the Act but he could not e-verify the said return for the reason that he could not obtain an OTP for the purpose on his mobile and further that he also did not have any local mobile number in India. It was submitted that, thus, there was a reasonable cause for the default which was entirely beyond the control of the assessee. However, the Assessing Officer did not accept the contentions of the assessee and proceeded to impose penalty of Rs.5,000/- u/s. 271F of the Act. 5. The assessee’s appeal before the NFAC was also dismissed and now the assessee has approached the ITAT challenging the confirmation of the impugned penalty by raising the following grounds of appeal: “1. The leaned CIT(A) erred in law and on facts in confirming the impugned penalty of Rs 5,000/- imposed u/s 271 F of the Act which is completely illegal and void ab initio as there was no such default in the relevant assessment proceedings as the return of income was very much f iled in time on 09/03/2020 on receipt of a notice u/s 148 of the Act but which was not accepted due to following reasons: ITA No. 698-Chd-2022 (A.Y. 2013-14) - Sh. Sabjeet Singh Sohi, Chandigarh 4 (i) The ITR V sent by the assessee through post f rom Canada (as no o ther mode was permissible then) was not received/ acknowledged in the CPC in India and (ii) The assessee could not obtain an OTP for the purpose on his overseas mobile number when he did not have any local mobile number in India for the purpose. Thus, the penalty levied mus t be deleted. 2. The learned CIT(A) erred in law and on facts in imposing the impugned penal ty of Rs. 5,000/- u/s 27IF of the Act by ignoring the facts, written submissions and evidences placed on record and by rejecting the bonafide explanation of the assessee for non-imposition of the penalty. Thus, the impugned penalty so imposed u/s 27IF of the Act mus t be deleted. 3. The appellant craves the leave to add, subs titute, modify, delete or amend all or any ground of appeal either before or at the time of hearing.” 6. The assessee has mentioned in the grounds of appeal that the assessee had duly filed the return of income in time on receipt of notice u/s. 148 of the Act, but the return was not accepted for two reasons: the first reason being that the ITR-V sent by the assessee through post from Canada was not acknowledged in the CPC in India and secondly, the assessee could not obtain OTP for the purpose of e- ITA No. 698-Chd-2022 (A.Y. 2013-14) - Sh. Sabjeet Singh Sohi, Chandigarh 5 verification on his overseas mobile number and further the assessee did not have any local mobile number in India for the said purpose. 7. The ld. Sr. D.R. vehemently supported the orders of the authorities below and submitted that it was a strong case for confirmation of the impugned penalty. 8. Having gone through the records and after having heard the ld. Sr. D.R., we are of the considered view that the assessee had a sufficient and reasonable cause which prevented his return of income filed in response to notice u/s. 148 of the Act from being treated as valid return of income. It is a fact on record that the assessee had duly filed return of income in response to notice u/s. 148 of the Act and it is only that he was prevented by a sufficient cause resulting in his return being treated as invalid as he was not having an Indian mobile number in which he could obtain a OTP for e-verification of the return of income. Also the CPC, Bangalore did not accept the copy of ITR sent by post from Canada and for these two reasons, even though the assessee had duly filed his return of income, the same could not be treated as valid. In such a situation, we find that the assessee was prevented by a sufficient cause and the default committed for not filing a valid return of income was entirely ITA No. 698-Chd-2022 (A.Y. 2013-14) - Sh. Sabjeet Singh Sohi, Chandigarh 6 beyond the control of the assessee and, therefore, in our view, the present case is not a fit case for imposition of penalty u/s. 271F of the Act. Accordingly, we direct the Assessing Officer to delete the impugned penalty. 9. In the result, the appeal filed by the assessee stands allowed. (Order pronounced in the open Court on 06/06/2023) Sd/- Sd/- (VIKRAM SINGH YADAV) (SUDHANSHU SRIVASTAVA) Accountant Member Judicial Member Dated : 06.06.2023 Aks/- आदेशकȧĤǓतͧलͪपअĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकरआय ु Èत/ CIT 4. आयकरआय ु Èत (अपील)/ The CIT(A) 5. ͪवभागीयĤǓतǓनͬध, आयकरअपीलȣयआͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 6. गाड[फाईल/ Guard File आदेशान ु सार/ By order, सहायकपंजीकार/ Assistant Registrar