Tribunal cancels penalties for late tax filing due to justified delay

The Tribunal allowed both appeals, deleting the penalty imposed under section 271F for assessment years 2008-09 and 2009-10. The Tribunal found that the delay in filing the return was justified due to the time-consuming process of obtaining and verifying seized documents. It emphasized that penalties should be based on specific facts of each case and concluded that the assessee had valid reasons for the delay, rendering the penalty invalid. As a result, the penalty imposed by the Assessing Officer and confirmed by the CIT(A) was deleted.

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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.

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