Clarification on Assessment order, Section 156 and section 271

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Vinod

engineer

27 Points Posted on 22 June 2024

Dear Experts, please advice. I was an NRI during assessment year 2019-20. I bought property and didnt filed IT returns during that time. I went thru the Faceless assessment procedure for the assessment year 2019-20. Now i received the final reply as follows

1) "Assessment order" says, i didnt provide proper responses to show the source of income. Although i provided detailed reply to IT Dept.

2) But Demand notice (section 156) says, I need to pay Rs.0 for Assessment year 2019-20 and computation sheet submitted by IT department provides NIL tax to be paid. Infact IT department refunded Rs.3000 rupees back to my account

3) But now IT Department opened the penalty notice u/s 271(1)(c), 271F, 271(1)(b).

Please advice, based on the demand notice (Section 156), can i consider this case is CLOSED (or) Based on assessment order, whether the case is OPEN and still IT Department can impose heavy penalty on me

Please advice. Whether penalty as per 271(1)(c), 271F, 271(1)(b) is applicable to me

Replies (2)

Quick Summary

An NRI who purchased property and failed to file IT returns for AY 2019-20 received a final assessment order stating insufficient income source details, despite providing responses. Curiously, the Section 156 demand notice indicates zero tax payable, and a refund was even issued. However, the IT Department has now initiated penalty proceedings under Sections 271(1)(c), 271F, and 271(1)(b). The user seeks clarification on whether the zero-demand notice closes the case or if penalties can still be imposed based on the assessment order.

JG M

40 Points Posted on 22 June 2024

Need to go through the order copy before any comment can be given to this query

Aashok Kumar Sharma

Finance/Compliance Consultant

77999 Points Posted on 08 November 2026

NRI who bought property but didn't file (AY 2019-20):

• If the AO passed an assessment (147/144) adding the property investment as unexplained (Sec 69), you can appeal to the CIT(A) within 30 days of the order. Show the source: NRE remittances (foreign income, not taxable in India for a non-resident), bank statements and remittance advices.

• For a non-resident, foreign income isn't taxable in India. If the funds came from abroad, the addition should be deleted.

• If the appeal deadline passed, file with a condonation request.

• Pay 20% of the demand (or seek a stay) to avoid recovery during the appeal.