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2024 (3) TMI 814 - ITAT JAIPURPenalty u/s 271(1)(c) - assessee has not filed the original return of income though he had taxable income/Interest income - bonafide belief - AO had information in his possession that the assessee had made investment in FDR and had received interest income - assessee contended before the AO that he was a non-resident not well versed with the income tax law in India and return was not field due to bonafide ignorance of law - penalty order had mentioned that the notice was issued on 16-12-2021 requesting the assessee to furnish reply by 20-12-2021 but no reply was furnished by the assessee. HELD THAT:- Observation of the AO is totally erroneous as the assessee had submitted the reply on the income tax portal on 18-12-2021 (i.e. before the due date) which is evident from the screen shot of the income tax portal and thus penalty levied by the AO is without considering the reply filed by the assessee and it is unjustified and thus deserves to be deleted. It is noted that the assessee before leaving India, was employed in Indian Company and used to live at a rented premises. He had parked his Indian Savings fixed deposits and mutual funds which continued during the year under consideration. The assessee did not file his income tax returns due to bona fide ignorance that tax has already been deducted by the Bank on interest income and due to his stay outside India. Thus the penalty was levied by the AO on interest income on which TDS was deducted which is also reflected in Form No. 26AS. Keeping in view the above facts, circumstances of the case and also the decision of ITAT Ahemdabad in the case Vijaybhai Dashrathbhi Patel [2022 (2) TMI 1429 - ITAT AHMEDABAD] wherein held assessee had earned interest income (being the only source of income for the captioned year), on which taxes had been duly withheld by the payer. Therefore, the assessee is conscious of the fact that the Income Tax Department is aware about his having income, but was of the mistaken view that once taxes have been deducted on this income, the assessee was not required to be filed return of income, thus not a fit case for levy of penalty since the assessee in the instant set of facts had reasonable cause for not filing of return of income - we do not concur with the order of the ld. CIT(A) and thus the appeal of the assessee is allowed.
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