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May 2024

Penalty under section 271F cannot be levied if estimated total income was less than maximum amount not chargeable to tax and assessee was not required to file return even pursuant to the provisos to section 139(1) though assessed income may have been greater than maximum amount not chargeable to tax. The basis of determination of income in the assessment order cannot be said to be the basis for filing of return of income under Section 139(1) of the Act.

By Jagdish T Punjabi, Chartered Accountant
Devendra Jain & Aditya Bhatt, Advocates
Reading Time 3 mins

10 Mahesbhai Prabhudas Gandhi v. ITO

I.T.A. Nos. 759 to 762 & 764 to 767/Ahd/2023

Assessment Years : 2013-14 to 2016-17

Date of Order: 21st February, 2024

Section 271F

Penalty under section 271F cannot be levied if estimated total income was less than maximum amount not chargeable to tax and assessee was not required to file return even pursuant to the provisos to section 139(1) though assessed income may have been greater than maximum amount not chargeable to tax. The basis of determination of income in the assessment order cannot be said to be the basis for filing of return of income under Section 139(1) of the Act.

FACTS

For AY 2013-14, a penalty under section 271F was levied for non-filing of return of income by the assessee. The total income of the assessee for the year

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