271F

This query is : Resolved

CA.Krishna (Querist)
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07 February 2011 dear sir,
an assessee had voluntarily filed return after End of the relevant assessment year.

On scruitiny assessment, AO made addition grossly based on lower withdrawal for household expenses. Nominal tax was demanded i.e. nearly 1600.chalan was paid by the assessee.

Now AO has issued notice u/s 271F.Reply of the assessee is reproduced as under. But AO has issued final opportunity considering that - Reply given by the assessee is not acceptable.

""

Respected Sir,
Sub: Reply to Show Cause Notice Imposing Penalty.
Ref: Your notice No. ________________________
Assessee : ________________________
PAN : __________
A.Y. : 2007-08

We are in receipt of your above captioned notice. In this connection, I beg to submit as under:
The Return of income for the A.Y. 2007-08 was filed by me/us on________ vide acknowledgement receipt no. __________.

As per the provision of section 139, any person may furnish the return of income for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.
It is further stated that the my client filed the return of income for A.Y. 2007-08 voluntarily, before issuance of notice u/s 142(1) of the Income-tax Act,1961.

It is further requested to kindly keep the following submissions on record before imposing any penalty u/s 271F:

1) The discretion given to the Income –tax Officer u/s 271F of the Income-tax Act should be used judiciously and not as a rule.

2) I/We were not liable to file Income tax return, being income being below the maxium amount not liable to tax.

3) On scrutiny assessment, AO had make addition on estimated bases based on lower withdrawal for house hold expenses. Or fluctuation in GP. The addition was so nominal that it is not possible to go for appeal as the expenses and fees for consultant was greater than the addition made by AO. So we paid the tax.

4) Even 271(1)© was not imposed because the addition was not because of concealment.
So we request you not to impose the penalty u/s 271F considering our return as voluntary return and not to treat it as taxable return.

However opportunity of being heard is accorded in case of any adverse view from your side.We will always ready to give further information/co operation if requires.

Yours Faithfully, ""

IS THE STEP TAKEN BY AO VIABLE ? WHAT SHOULD BE DONE ?

PLEASE REPLY.

Guest

Guest (Expert)

07 February 2011 When the return was filed.

CA.Krishna

CA.Krishna (Querist)
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08 February 2011 return for AY 2007-08 filed on 22.03.08

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Guest

Guest (Expert)

08 February 2011 Penalty u/s 271F is not leviable as the return was filed before the end of a.y.

CA.Krishna