2022 (11) TMI 214 - AT - Income Tax

Penalty u/s. 271F - deficiency in service of notices and the AO has proper jurisdiction for issue of notice u/s.153A - HELD THAT - The levy/confirmation of penalty is based on the facts of each case. There is no presumption that the assessee is willfully violating the law. It is an admitted fact that notice u/s.153A has been served on the assessee and the assessee is required to file the return within 30 days. It is also an admitted fact that for obtaining of the Xerox copies of the seized document, it took more than 2-3 months. Just by obtaining of xerox copies of seized documents, the return cannot be filed. It has to be co-related, verified, examined and reconciled before the return is filed. The filing of return beyond the due date is admittedly invalid return as there is no provision for filing the return belatedly once notice u/s.153A has been issued. This being so, we are of the view that the assessee had a valid ground for non-filing of return. Accordingly, penalty levied by the AO and confirmed by the CIT(A) is deleted. Appeals of the assessee are allowed.

Summary

Issues:
Appeals against levy of penalty u/s.271F of the Act for assessment years 2008-09 & 2009-10.

Analysis:
The appeals were filed against the order of the ID CIT(A)-1, Bhubaneswar confirming the penalty u/s.271F of the Act. The assessee, through the ld AR, argued that the non-filing of the return was due to the process of collecting seized documents, and thus, requested the deletion of the penalty. On the other hand, the ld CIT DR contended that the penalty was justified, citing a previous decision by the Co-ordinate bench and emphasizing the timely provision of Xerox copies of the seized documents to the assessee.

The Tribunal considered the submissions and emphasized that the levy and confirmation of penalty must be based on the specific facts of each case, without presuming willful violation of the law by the assessee. It was acknowledged that the notice u/s.153A was served on the assessee, mandating the filing of the return within 30 days. However, the process of obtaining Xerox copies of seized documents took more time than anticipated. The Tribunal highlighted that merely obtaining Xerox copies did not automatically enable the filing of the return, as the documents needed to be cross-checked, verified, and reconciled. Given these circumstances, the Tribunal concluded that the assessee had a valid reason for the delay in filing the return, rendering the penalty invalid.

Consequently, the Tribunal allowed both appeals of the assessee, thereby deleting the penalty imposed by the AO and confirmed by the ld CIT(A). The order was pronounced in open court on 22/9/2022.