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June 7, 2022

Despite receiving a section 148 warning, the non-filing of a return is justified under section 271F

by CA Shivam Jaiswal in Income Tax

Despite receiving a section 148 warning, the non-filing of a return is justified under section 271F

Facts and issues of the case

 The assessee is an individual and as per the Non-Filers Monitoring System information available with the Department, the assessee had made deposit of Rs.12 lakhs in Bank of India. As the assessee has not filed  return  of  income relating to the Asstt.Year 2011-12, the assessment was reopened by issuance of notice was issued under section 148 of the Act on 31.3.2018 after recording reasons and obtaining prior approval from the Pr.CIT, Gandhinagar. The assessee had not  filed  return  of income in response to 148-notice. Hence, the assessment was completed under section 144 read with section 147 of the Act on 27.11.2018 determining total income at Rs.12,39,100/- and also initiated penalty proceedings under section 271F of the Act. The exparte assessment order was duly served on the assessee. Another notice under section 271F of the Act was issued on  18.3.2019 seeking compliance on or before 10.4.2019. However, the assessee failed to furnish reply for the aforesaid notice.   If a person required to furnish a return of income, as per section 139(1), and if he fails to furnish the  return before the end of relevant assessment year, the AO may direct that such person shall pay, by way of  penalty u/s.271F, a sum of Rs.5000/-. As the assessee has never filed a return of income, the AO levied penalty of Rs.5,000/- by invoking section 271F of the Act. Aggrieved against this penalty order, the assessee filed appeal before the NFAC.

Before the NFAC there is a delay in filing  appeal  (how  many days’ delay has not been specified in this order) and requested for condonation of delay in  filing  appeal.  The  ld.NFAC  condoned  the delay and posted for hearing  of  the  appeal  on  17.8.2021.  As  there was no response to the hearing notice one more hearing was fixed on 28.10.2021. Again in response to the second notice, none appeared on behalf of the assessee and no details has been furnished, therefore, the appeal was dismissed by the NFAC.

Observation by the court

Court had gone through the impugned order.  Though the ld.CIT(A) has given two opportunities to the  assessee,  as  non- appeared on behalf of the assessee, the appeal of the assessee was dismissed. Further, perusal of records clearly shows that  no explanation or reason  adduced  before  any  of  the  lower  authorities. In the absence of any records and evidences, we are  not  in a  position to  adjudicate  this  case.  Further, the penalty  orders  clearly  states that the assessee did not file the return of income in response to the notice issued under section 148 of the Act till the date of finalization of the order. Therefore, we reject the ground of appeal raised by the assessee.


The Appeal of the assessee was dismissed by the court.


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