Penalty for Non-Filing ITR u/s 271F not mandatory: ITAT Deletes Penalty

The Income Tax Appellate Tribunal (ITAT) in the matter of Sheel Agarwal vs Income Tax Office has deleted the penalty order for Non-Filing of Income Tax Return (ITR) passed u/s 144 and order u/s 271F of the Income Tax Act, 1961.

Order of the ld. CIT(A)

The order u/s 271F has been passed on 28 .02.2022 levying penalty of Rs.5,000/- . Aggrieved, the assessee filed appeal before the ld. CIT(A) who passed the order on 30 .11.2022 . The order of the ld. CIT(A) is as under:

“Penalty under section 271F is not mandatory. AO may direct to the defaulter to pay a penalty of Rs.5000/-. In this case the appellant is a senior citizen and widow aged 82. The case was done exparte under section 144 r .w .s. 147 . The appellant has never filed return income as she is a housewife and had no taxable income. Having looked at her condition, the AO may have waived off the penalty under section 271F.

ITAT Order:

6. We find that the order of the Id. CIT(A) is approbate and reprobate without any rhyme or reason.

7. The provisions of Section 271F reads as under:

“Penalty for failure to furnish return of income

271F: If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees.”

8. The assessee is 82 years old widow and never filed return of income as she is housewife and never had taxable income. We hold that provisions u/s 271F are not attracted to the case of the assessee and hence the penalty levied is hereby obliterated.

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