TMI Blog2023 (2) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... that the explanation offered by the assessee have been ignored by the A.O. as well as the Ld. CIT(A)-NFAC but confirmed the levy of penalties u/s. 271(1)(b) and u/s. 271F of the Act without considering u/s. 273B - Applying the provisions of Section 273B we have no hesitation in deleting the penalties levied u/s. 271(1)(b) and u/s. 271F of the Act since reasonable cause is clearly demonstrated by the assessee. Therefore the penalties levied u/s. 271(1)(b) and u/s. 271F are deleted. - Appeal of assessee allowed. - ITA Nos: 71 & 74/Ahd/2021 - - - Dated:- 10-2-2023 - Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Assessee : None For the Revenue : Shri N.J. Vyas, Sr.D.R. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dated 18.06.2019 that there is below taxable income, hence was not liable to file the Return of Income. Further because of the bad health of the Accountant on account of prolonged illness, he could not reply to the notices. However the A.O. has not satisfied with the reply form the assessee and thereby levied a penalty of Rs.10,000/- under section 271(1)(b) of the Act. 3. Similarly, the penalty notice under section 271F was issued for non-filing of the Return of Income. The assessee replied vide its letter dated 18.06.2019 that there is below taxable income, hence was not liable to file the Return of Income. This explanation was not accepted by the Assessing Officer and thereby levied a penalty of Rs.5,000/- under section 271F of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission for the reasons beyond his control. 2. The Learned CIT(A) has erred in not property appreciating the facts, various submissions, explanations and information submitted by the appellant during the appeal proceedings which ought to have been considered in proper perspective before passing the impugned order. 3. The order passed by the learned CIT(A) is illegal, Invalid and bad in law. It be so held now. 5.1. The Grounds of Appeal raised by the assessee in ITA No. 74/Ahd/2021 is as follows: 1. The learned CIT(A) erred in law and on facts in confirming penalty of Rs. 5000/- made by the learned ITO for failure to file the return of income within prescribed time limit. The levy of penalty imposed by the learned CIT(A) de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered the same and then proceed with levying penalties. 7.2. A perusal of the above provisions of u/s. 271(1)(b) and u/s. 271F shows that the Parliament has used the words may and not shall , thereby making their intention clear in as much as that levy of Penalty is discretionary and not automatic. The said conclusion is further justified by Section 273B of the Act namely Penalty not to be imposed in certain cases . A careful reading of Section 273B encompasses that certain penalties shall not be imposed in cases where reasonable cause is successfully pleaded. It is seen that penalties imposable u/s. 271(1)(b) and u/s 271F are also included therein. By the said provisions, the Parliament has unambiguously made it clear that no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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