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Case Law Details

Case Name : Ashwin Liladhar Shah Vs National Faceless Appeal Centre Delhi (ITAT Mumbai)
Appeal Number : ITA No. 44/Mum/2023
Date of Judgement/Order : 31/05/2023
Related Assessment Year : 2012-13
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Ashwin Liladhar Shah Vs National Faceless Appeal Centre Delhi (ITAT Mumbai)

The Income Tax Appellate Tribunal (ITAT) Mumbai, in a recent case involving an advocate, upheld the penalty under section 271F imposed for late filing of Income Tax Returns (ITRs). The appellant argued that he was unaware of the fact that the income earned from a partnership firm was liable for tax, asserting it as a reasonable cause for the delay in filing the ITR.

The court observed that the appellant, an advocate by profession and partner in a law firm, couldn’t rely on the assertion that he was ignorant about the tax obligations concerning income earned from a partnership firm. The court emphasized the Latin maxim “Ignorantia juris non excusat,” meaning ignorance of law is no excuse. The court opined that being an advocate, the appellant holds a higher responsibility to be aware of the law’s provisions, making his claim unacceptable. Further, the argument of financial crises and his accountant leaving employment didn’t justify the late filing of ITRs. In essence, the tribunal upheld the penalty imposed by the Assessing Officer, confirming that the reasons cited by the assessee for the failure to file ITRs were not ‘reasonable causes’ under section 273B of the Income Tax Act.

This ruling from ITAT Mumbai reemphasizes that ignorance of the law, especially regarding tax obligations, is not an acceptable defense for failure to comply with the provisions of the Income Tax Act. The onus is on every individual, especially those in the legal profession, to be cognizant of their tax liabilities, and any failure in fulfilling these duties could potentially attract penalties.

Tax Law for Partnership Income

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July 2024