Case Law Details
Hakim Khan Sumergadh Bibalsar Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that penalties under section 271(1)(b) and section 271F of the Income Tax Act are not leviable on reasonable cause demonstrated by the assessee.
Facts- Assessee made cash deposit to the tune of Rs. 27,51,150/- in the bank account, however, didn’t filed return of income. Accordingly, notice was issued u/s 148 which was not replied. Therefore, an ex-parte assessment was passed determining total income at Rs. 27,51,600/-.
Following the same, notice u/s. 271(1)(b) was issued as why not to levy of penalty for non-compliance of the notices issued u/s. 142(1) of the Act. The assessee responded vide reply letter dated 18.06.2019 that there is below taxable income, hence was not liable to file the Return of Income. Further because of the bad health of the Accountant on account of prolonged illness, he could not reply to the notices. However the A.O. has not satisfied with the reply form the assessee and thereby levied a penalty of Rs.10,000/-under section 271(1)(b) of the Act.
Similarly, the penalty notice u/s. 271F was issued for non-filing of the Return of Income. The assessee replied vide its letter dated 18.06.2019 that there is below taxable income, hence was not liable to file the Return of Income. This explanation was not accepted by AO and thereby levied a penalty of Rs.5,000/- u/s. 271F of the Act.
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