Case Law Details
Arjun Dada Kharate Vs DCIT (ITAT Pune)
The issue under consideration is whether the Penalty u/s 271F will be levied for non filing of Income Tax Return (ITR) even in case of reasonable cause?
ITAT states that, the assessee stated reasons before the ld. CIT(A) for not furnishing the return u/s.139(1) of the Act. Such reasons have been reproduced in para 5 of the impugned order. The reasons referred to the assessee being an agriculturist and illiterate; facing financial and family problems; under the impression that gain arising from sale of any agricultural land not chargeable to tax. When we consider the entirety of the facts and circumstances obtaining in this case, it becomes apparent that there was reasonable cause on the part of the assessee in not filing return u/s.139(1) of the Act, against which the penalty has been imposed and confirmed u/s.271F of the Act. 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. In the given facts, ITAT find that there was a reasonable cause with the assessee for non filing of Income Tax Return. This being the position, the case gets covered u/s 273B of the Act. Hence, ITAT order to delete the penalty.
FULL TEXT OF THE ITAT JUDGEMENT
These two appeals by the different but related assessees arise out of the orders dated 29-05-2017 passed by the ld. CIT(A)-1, Nashik confirming penalty imposed u/s.271F of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2011-12. Since a common issue is raised in these appeals, we are, therefore, proceedings to dispose them off by this consolidated order.
ARJUN DADA KHARATE :
2. Succinctly, the facts in the case of Arjun Dada Kharate are that he, along with other related persons, sold certain land/immovable property at Gat No.150 & 151, Makhmalabad, Nashik to Suyojit group of Nashik with his share in the transaction at Rs.96,66,666/-. The assessee filed his return on 19-12-2013 declaring total income at Rs.43,93,199/-. Since the return was beyond the time stipulated u/s 139(1) of the Act, assessee was served with a notice u/s.148. Assessment order was passed u/s.143(3) r.w.s.147 assessing total income at Rs.42,24,116/-. The Assessing Officer (AO) imposed penalty of Rs.5,000/- u/s.271F of the Act on the ground that the assessee failed to file his return of income within the time prescribed u/s.139(1) of the Act. The assessee made certain written submissions before the ld. CIT(A) seeking deletion of penalty, which did not find favour with the ld. first appellate authority, who affirmed the penalty.
3. We have heard the ld. DR through virtual court and gone through the relevant material on record. It is seen from the impugned order that the assessee stated reasons before the ld. CIT(A) for not furnishing the return u/s.139(1) of the Act. Such reasons have been reproduced in para 5 of the impugned order. The reasons referred to the assessee being an agriculturist and illiterate; facing financial and family problems; under the impression that gain arising from sale of any agricultural land not chargeable to tax. When we consider the entirety of the facts and circumstances obtaining in this case, it becomes apparent that there was reasonable cause on the part of the assessee in not filing return u/s.139(1) of the Act, against which the penalty has been imposed and confirmed u/s.271F of the Act. 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. In the given facts, we find that there was a reasonable cause with the assessee in the terms given in para 5 of the impugned order.
This being the position, the case gets covered u/s 273B of the Act. As such, we order to delete the penalty.
BHIMA DADA KHARATE :
4. The facts in the case of Bhima Dada Kharate are mutatis mutandis similar to those discussed supra in the case of Sh. Arjun Dada Kharate. Following the view taken hereinabove, we order to delete the penalty.
5. In the result, both the appeals are allowed.
Order pronounced in the Open Court on 10th August, 2020.
