2016 (11) TMI 659 - AT - Income Tax

Levying penalty u/s. 271F - delay in filing the return of the assessee i.e. beyond the stipulated period mentioned in the notice issued u/s. 153C - Held that - In this case the assessee filed returns belatedly and there is reasonable cause in filing the return in time stating that there were 8 assessees in its group and total 55 search assessments were in progress and the returns of the entire group were also required to be filed and therefore there is little delay in filing the returns. Also that Chairman/Chief Promoter of the group was unwell/sick and was not attending to the business regularly and he was hospitalized twice and further the record does not show that assessee has acted either deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. In the circumstances, we hold that assessee was prevented with reasonable cause in filing the returns and there is no deliberate attempt to file the returns belatedly. Thus, we delete the penalty levied u/s. 271F of the Act. - Decided in favour of assessee

Summary

Issues:
- Penalty under section 271F of the Income Tax Act for delay in filing returns.

Detailed Analysis:
1. The appeals were filed against the order of the Ld. CIT(A) sustaining the penalty under section 271F of the Act for the assessment years 2007-08 to 2011-12.
2. The primary contention was that the delay in filing the returns was beyond the control of the assessee due to various reasons, including the unwellness of the Chairman/Chief Promoter and reduced accounting staff.
3. The Assessing Officer issued a notice under section 271F as the returns were filed beyond the specified time in the notice issued under section 153C, leading to the penalty imposition.
4. The assessee argued that the penalty should be deleted as there was no willful default, and the delay was due to reasonable causes, such as the necessity to file multiple returns and the health issues of key personnel.
5. The assessee relied on the decision of the Hon'ble Supreme Court in Hindustan Steel Ltd. v. State of Orissa, emphasizing that the penalty imposition is not automatic and should be based on judicious exercise of discretion by the Assessing Officer.
6. The Tribunal observed that there was no deliberate attempt to file the returns belatedly, and the delay was due to reasonable causes beyond the control of the assessee.
7. Citing the Supreme Court's decision, the Tribunal held that penalty under section 271F should not be imposed unless there is deliberate defiance of the law or contumacious conduct, which was not evident in this case.
8. Consequently, the Tribunal allowed the appeals, deleting the penalty under section 271F for the delay in filing the returns for the relevant assessment years.
9. The decision was pronounced on 21st September 2016 by the Tribunal.