2023 (6) TMI 122 - AT - Income Tax

Penalty u/s. 271F - non- filing of ITR - assessee has failed to explain the reasonable cause for non filing of the returns inspite of having earned income from various sources - Reasonable cause for failure - assessee is an Advocate by profession and is also a partner in a law firm - HELD THAT - Assessee has merely stated that owing to the financial crisis and his Accountant quitting the employment the assessee was unable to file returns, cannot be a reasonable cause for the failure on the part of the assessee. It is also pertinent to point out the fact that the assessee was on a bonafide belief that income of a partnership firm is exempted from tax, is an unacceptable contention that cannot be relied upon by a person like the assessee who is himself in the Advocacy of law. As well aware of the Latin maxim Ignorantia juris non excusat which means ignorance of law is no excuse , holds applicable not only to a common man but also to a person who has to hold the integrity of the law of land. The assessee is in a higher footing than any other person to be aware of the provisions of the statute nevertheless to mention that he has to abide by the said law. No reason stated by the assessee for the failure in filing the ITR is not a reasonable cause nor is it sufficient to delete the impugned penalty levied by the A.O. and confirmed by the ld. CIT(A) - Decided against assessee.

Summary

Issues involved:
The judgment deals with the challenge against the penalty imposed under section 271F of the Income Tax Act, 1961 for failure to file the return of income for the Assessment Year 2012-13.

Levy of Penalty under Section 271F:
The appellant, an individual engaged in the legal profession and a partner at a law firm, failed to file the return of income for the relevant assessment year. The Assessing Officer initiated penalty proceedings under section 271F and imposed a penalty of Rs.5,000 for the failure to comply with the filing requirements. The appellant contended that financial difficulties and the departure of the accountant led to the failure to file returns. However, the authorities upheld the penalty, emphasizing that the appellant failed to provide a reasonable cause for the non-filing of returns despite earning income from various sources. The appellant's argument that income from a partnership firm was exempt from tax was deemed unacceptable given the appellant's profession and legal knowledge. The Tribunal found the reasons provided by the appellant insufficient to delete the penalty, as they did not constitute a reasonable cause as required by the law. The appeal against the penalty was dismissed, affirming the decision of the lower authorities.

Separate Judgment by Judges:
The judgment was delivered by Ms. Kavitha Rajagopal, JM, and Shri Prashant Maharishi, AM.