Umesh Govindrao Patil Vs ITO (ITAT Panaji)
Return Filing Failure Caused by Tax Consultant Is Reasonable Cause; Panaji ITAT Deletes Penalties under Sections 271F and 271(1)(c)
The assessee, a salaried employee, earned salary of ₹9,55,296, on which tax had been deducted and duly reflected in Form 16 and Form 26AS. Although the assessee had provided all relevant particulars to his regular tax consultant, the return for AY 2015-16 was not filed because the consultant was facing health and family problems.
Following reassessment proceedings, the AO levied:
- ₹5,000 under section 271F for failure to file the return; and
- ₹47,442 under section 271(1)(c) for alleged concealment or furnishing inaccurate particulars.
The ITAT noted that the assessee had been relying on the same consultant for more than 20 years. The consultant furnished written confirmation that the return could not be filed despite receiving the necessary details because of his personal difficulties.
The Tribunal held that these circumstances constituted a reasonable cause under section 273B. Consequently, the penalty of ₹5,000 under section 271F was deleted.
Regarding the concealment penalty, the ITAT observed that the salary, TDS, house-property loss and deduction under section 80C were already reflected in Form 16 and Form 26AS. Further, the income declared in the return filed in response to notice under section 148 was accepted by the AO.
Accordingly, the Tribunal held that the assessee had neither concealed income nor furnished inaccurate particulars, and deleted the penalty of ₹47,442 under section 271(1)(c).
FULL TEXT OF THE ORDER OF ITAT PANAJI
The captioned appeals at the instance of assessee pertaining to A.Y. 2015-16 are directed against the separate orders dated 04.12.2025 framed by National Faceless Appeal Centre, Delhi arising out of respective Penalty Orders dated 02.05.2024 passed u/s.271(1)(c) and u/s.271F of the Income Tax Act, 1961 (in short ‘the Act’). Assessee by: Shri Ulhas Kini (virtual) Revenue by: Shri Mayur Kamble Date of hearing: 12.08.2026 Date of pronouncement: 18.08.2026
2. The grievance of the assessee in ITA No.79/PAN/2026 is against the levy of penalty u/s.271(1)(c) of the Act at Rs.47,442/- and in ITA No.81/PAN/2026 is against levy of penalty u/s.271F of the Act at Rs.5,000/-.
3. At the outset, ld. Counsel for the assessee submitted that the assessee is a salaried employee and is dependent upon the Tax Consultant who regularly files the return of the assessee. As per Form No.16, the assessee earned salary income of Rs.9,55,296/- and tax at source has been deducted and reflected in Form No.26AS. However, for non- furnishing of return that too on account of mistake on the part of Tax Consultant who has also given a declaration to this effect, return could not be furnished for the year under consideration due to which penalty u/s.271F has been levied which deserves to be deleted in light of the provisions of section 273B of the Act. Further, since tax at source has been deducted on the salary income and that the Assessing Officer has accepted the returned income as shown in the return filed in response to notice u/s.148 of the Act, assessee should not be subjected to levy of penalty u/s.271(1)(c) of the Act. Further, assessee has sold one residential house for a consideration of Rs.35.00 lakh on 25.09.2014 and thereafter has purchased immovable property on 09.11.2015 at Rs.44,77,635/ – and that ld. Assessing Officer has allowed the deduction u/s.54F of the Act.
4. On the other hand, ld. Departmental Representative vehemently argued supporting the order of ld.CIT(A).
5. We have heard the rival contentions and perused the record placed before us. We observe that the assessee is an individual and working with Karl Storz Endoscope India Private Limited, New Delhi and gross payment on account of salary has been received at Rs.9,55,296/- and tax at source has been deducted at Rs.47,442/-. The assessee’s claim of loss from house property at Rs.2.00 lakh and deduction u/s.80C of the Act is duly reflected in Form No.16. We also note that assessee regularly gets its return filed through Tax Consultant namely Mr. Abdul G. Sayyed since last more than twenty years. However, for the year under consideration as per the letter of confirmation given by the Tax Consultant, it is submitted that even though the assessee has provided all the requisite details but due to the Tax Consultant’s health and family problems, the return could not be furnished. Taking note of these facts, we are of the considered view that assesee has reasonable cause which prevented him to file the return within the stipulated time limit and therefore in view of provisions of section 273B of the Act, the penalty levied u/s.271F of the Act at Rs.5,000/- for non-furnishing of return of return deserves to be deleted. Finding of ld.CIT(A) is reversed and the impugned penalty of Rs.5,000/- is deleted.
6. So far as the issue of levy of penalty u/s.271F is concerned, we notice that the assesse e is a salaried employee and that salary income is duly reflected in Form No.16 and Form No.26AS which are uploaded on the income tax portal. The income declared in the return of income filed in response to the notice u/s.148 of the Act has been accepted. Therefore, it makes it clear that the assessee has neither concealed the particulars of income nor has furnished inaccurate particulars of income. In view thereof, we set aside the finding of ld.CIT(A) and delete the penalty levied u/s.271(1)(c) of the Act at Rs.47,442/-. Grounds of appeal raised by the assessee are allowed.
7. In the result, both the appeals of the assessee are allowed.
Order pronounced on this 18th day of August, 2026.
