Penalties Deleted: Valid Reasons for Tax Return Delay Accepted

The tribunal found reasonable cause for the delay in filing returns under section 271F of the Income-tax Act, 1961 for both Arjun Dada Kharate and Bhima Dada Kharate. The penalties imposed on them were deleted as the tribunal concluded that they had valid reasons for the delay, in line with section 273B, which exempts penalties if reasonable cause is established. Both appeals were allowed, and the penalties were ordered to be deleted. The judgment was delivered on 10th August 2020.

---

---

Issues:
Penalty imposed under section 271F of the Income-tax Act, 1961 for failure to file return within the stipulated time.

Analysis:

Arjun Dada Kharate:
The appellant, along with related persons, sold land to a group in Nashik and filed the return beyond the time specified under section 139(1) of the Income-tax Act, 1961. The Assessing Officer imposed a penalty under section 271F for the delay. The appellant appealed to the ld. CIT(A) citing reasons for the delay, including being an agriculturist, illiterate, financial and family problems, and misunderstanding about tax liability on agricultural land sale gains. Upon review, the tribunal found reasonable cause for the delay as per section 273B, which states that no penalty shall be imposed if a reasonable cause is established. The tribunal concluded that the appellant had a valid reason for the delay and ordered the penalty to be deleted.

Bhima Dada Kharate:
The circumstances in the case of Bhima Dada Kharate mirrored those of Arjun Dada Kharate. Following the decision made in Arjun Dada Kharate's case, the tribunal also decided to delete the penalty imposed on Bhima Dada Kharate under section 271F.

In conclusion, the tribunal allowed both appeals and ordered the deletion of the penalties. The judgment was pronounced in the Open Court on 10th August 2020.

---