2025 (10) TMI 134 - AT - Income Tax

Penalty under s.271F deleted for late return where RFCTLARR Act s.96 compensation held non-taxable, no basis to sustain penalty

ITAT (DELHI - AT) allowed the appeal and deleted the penalty under s.271F for failure to file a return by the due date under s.139(1), holding that the ... Penalty u/s 271F - assessee had not filed any return on or before the due date u/s 139(1) - HELD THAT:- What the assessee has received was his compensation under the provisions of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which is admittedly not taxable u/s 96 thereof. Faced with this situation, we find no reason to sustain the impugned section 271F penalty levied by the learned lower authorities. The same is directed to be deleted therefore. Assessee’s appeal is allowed. Appeal to ITAT Delhi against CIT(A)/NFAC order levying penalty under section 271F for failure to file a return on or before the due date under section 139(1). Assessee did not appear and matter proceeded ex parte; Revenue supported imposition of penalty. Tribunal examined nature of receipts and found they were compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which is admittedly 'not taxable u/s 96 thereof.' On that basis the Tribunal concluded there was no justification to sustain the impugned section 271F penalty and directed its deletion. Appeal allowed; order pronounced 21/01/2025.