2020 (9) TMI 726 - AT - Income Tax

Penalty u/s 271(1)(b) - assessee did not comply with the notice issued u/s 142(1) of the Act requiring the assessee to furnish certain information - HELD THAT - DR could not bring out any evidence nor could establish that the facts in assessee s own case in A.Y. 2009-10 2020 (9) TMI 690 - ITAT PUNE was something different as compared to these appeals of the assessee before us. Nor he could place any decision of the Higher Forum on this issue in support of the Revenue. As already taken for A.Y. 2009-10 assessee has submitted before the Assessing Officer a medical certificate from Dr. Majoj Dashpute stating that the assessee was under his treatment for depression with anxiety disorder for the last two years. AO still levied the penalty saying that this is not sufficient reason for non-compliance of notice and therefore the AO has absolutely overlooked the facts on record which are genuine. Neither the AO nor the CIT(A) has brought on record anything against the evidences furnished by the assessee regarding his ill-health. We are of the considered view that this is not a fit case for imposition of penalty u/s. 271(1)(b) - we delete the penalty and allow the appeals of the assessee. Penalty u/s 271F - non-filing of return of income u/s 139(1) - HELD THAT - DR has not made out a case wherein the provisions of Sec.271F of the Act are so stringent that word by word, if Section 139(1) of the Act is not complied with, the penalty will be levied irrespective of any practical or reasonable situations brought on record. In this case, in the entire order of the learned Assessing Officer as well as the ld. CIT(Appeals), the penalty has been levied u/s 271F of the Act for non-filing of return but the Revenue has failed to conduct any specific enquiry as regards the facts stated by the assessee whether they are correct or not. There is no finding to that effect. In our considered view, the facts are on record and they have not been disputed by the Department. Considering the totality of the facts and circumstances, we do not find this as a fit case for imposing penalty u/s 271F of the Act. We therefore delete the penalty imposed u/s 271F of the Act from the hands of the assessee. Appeal of assessee allowed.

Summary

Issues:
Penalty under section 271(1)(b) of the Income Tax Act for non-compliance with notice u/s 142(1) and 271F for non-filing of return of income u/s 139(1).

Penalty under section 271(1)(b) - Detailed Analysis:
The appeals were related to penalties imposed under section 271(1)(b) of the Income Tax Act for non-compliance with notices. The assessee, engaged in trading, did not respond to a notice issued u/s 142(1) of the Act, leading to penalty proceedings. The Assessing Officer imposed a penalty of ?10,000, which was confirmed by the CIT(A). The assessee cited health issues, specifically acute depression, as the reason for non-compliance, supported by medical certificates. The Pune Tribunal had previously ruled in favor of the assessee in a similar case for A.Y. 2009-10. The Tribunal noted that the Assessing Officer overlooked genuine medical evidence and deleted the penalty. The Departmental Representative failed to provide evidence to differentiate the current case from the previous ruling. Consequently, the Tribunal found no justification to deviate from its previous decision and deleted the penalties for all related appeals under section 271(1)(b).

Penalty under section 271F - Detailed Analysis:
In another appeal, the penalty under section 271F was imposed for non-filing of the return of income u/s 139(1). The assessee, suffering from depression and under medical treatment, provided medical certificates and prescriptions to support her condition. The Tribunal emphasized that the Income Tax Act, being a welfare legislation, requires consideration of practical circumstances. The Department did not dispute the genuineness of the assessee's health issues. The Tribunal observed a lack of specific inquiry by the Revenue into the facts presented by the assessee. Considering the circumstances and the failure of the Revenue to challenge the facts, the Tribunal deemed it unfit to impose the penalty under section 271F. Consequently, the penalty was deleted, and the appeal under ITA No.1612/PUN/2017 was allowed.

In conclusion, all the appeals of the assessee related to penalties under section 271(1)(b) and 271F were allowed by the ITAT Pune, emphasizing the importance of considering genuine health issues and practical circumstances while imposing penalties under the Income Tax Act.