83-year-old woman, not liable to file tax returns, wins case against fine

economictimes.indiatimes.com:

MUMBAI: An 83-year-old widow, who was not liable to file her IT return, has obtained a favourable order from the income-tax appellate tribunal (ITAT), Delhi bench. The tax tribunal set aside the penalty imposed on her for not filing her tax return. This Gurgaon-based octogenarian who had never filed an I-T return, as she was a homemaker and did not have taxable income, would have understandably been shocked to get a demand of Rs 5,000 — a penalty imposed under (erstwhile) section 271F of the I-T Act for not filing the tax return by the due date.

This action was taken in respect of the financial year 2011-12. To make matters worse, the commissioner (appeals) did not provide a proper direction as regards this penalty. It should be noted that the provisions of section 271F have been substituted with section 234 F from April 1, 2018.

Currently, the penalty for late filing of an I-T return is Rs 5,000 (for small taxpayers whose total income is not more than Rs 5 lakh, it is Rs 1,000). The gutsy lady decided to fight it out. Before the ITAT, she submitted that the I-T officer made an error in framing the assessment order under section 144 read with section 147 of the I-T Act.

A proper procedure was not followed. Orders passed under this section are ex-parte, and the assessment is carried out according to the ‘best judgment’ of the I-T office based on the available material. Later, even though she had filed an appeal against this order and submitted that she was not liable to file a return for the financial year in dispute, the Commissioner (Appeals) under the faceless appeal mechanism, did not consider this fact.