In ITA No. 294/JP/2023 -ITAT- ITAT (Jaipur) takes lenient stance, sets aside Rs. 5,000 penalty imposed under Section 271F of Income Tax Act for bona fide mistake of the taxpayer
Member Sandeep Gosain (Judicial) [13-07-2023]

Read Order: Shri Mukesh Pathak v. The ITO

Chahat Varma

New Delhi, August 9, 2023:  The Jaipur bench of the Income Tax Appellate Tribunal has ruled in favour of the taxpayer by allowing his appeal against a penalty imposed under Section 271F of the Income Tax Act. The Tribunal took into account the taxpayer's bona fide mistake, proper tax payment, absence of revenue loss, and set aside the penalty of Rs. 5,000 imposed under Section 271F.

In the case at hand, the appellant filed an appeal asserting that the NFAC had made an error in both law and facts by upholding a penalty of Rs. 5,000 under Section 271F. The appellant's argument was based on the premise that they were not obligated to file their return due to their income falling below the basic threshold.

Upon reviewing the records, the single-member bench of Sandeep Gosain (Judicial) noted that the assessee was obligated to file their income tax return under Section 139(1) of the Income Tax Act, which they failed to do. This failure to comply with the filing requirement led to the initiation of reopening proceedings by the Assessing Officer (AO).

After a thorough examination of the case's details, the bench arrived at the conclusion that the assessee's explanation and defence warranted consideration. They took into account the fact that the non-compliance was due to a bona fide mistake. Furthermore, the bench recognized that the revenue had not suffered any loss. Consequently, the appeal filed by the assessee was granted and allowed.