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Issues:
- Appeal against cancellation of penalty under section 271(1)(a) of IT Act - Justification for delay in filing return of income - Bona fide belief of the assessee regarding tax liability - Comparison with similar case of Shri Bal Ram - Tribunal's observations in the case of Shri Bal Ram - Similarity of facts between the two cases Analysis: The appeal before the Appellate Tribunal ITAT DELHI-B involved the cancellation of a penalty of Rs. 22,717 imposed by the Income Tax Officer (ITO) under section 271(1)(a) of the IT Act. The penalty was levied due to a delay in filing the return of income by the assessee. The assessee, an agriculturist, argued that their income was not taxable under the IT Act as it arose from the compulsory acquisition of agricultural lands. The assessee claimed a bona fide belief that they were not liable to pay tax, which led to the delay in filing the return. In the appeal, the assessee highlighted that a similar penalty imposed on another individual, Shri Bal Ram, for the same assessment year was canceled by the Assistant Commissioner of Income Tax (AAC). The AAC, considering the facts and the belief of the assessee, held that the penalty was not justified. The departmental representative contested the cancellation, stating that the penalty was rightly imposed. The Tribunal referred to the case of Shri Bal Ram, where it was held that the delay in filing the return was justified due to a reasonable cause. The Tribunal in that case also determined that no capital gains tax was applicable to the transfer of agricultural lands in the same village. Drawing a parallel between the two cases, the Tribunal concluded that the imposition of the penalty in the present case was not proper. The Tribunal confirmed the AAC's decision and dismissed the appeal, emphasizing the similarity in facts and the bona fide belief of the assessee regarding their tax liability.
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