2006 (9) TMI 347 - AT - Income Tax

Summary

Issues:
The judgment involves the confirmation of penalty u/s 271(1)(c) of the Income-tax Act by the CIT(A) against the appellant, a foreign national working in Hotel Leela Venture Ltd., for alleged concealment of income or furnishing inaccurate particulars.

Details of the Judgment:

Issue 1: Penalty u/s 271(1)(c) - Claim of Exemption under section 10(6)(viia):
The appellant contended that all conditions u/s 10(6)(viia) were fulfilled, seeking exemption for tax perquisites. The Assessing Officer added back the tax perquisites to the total income, rejecting the exemption claim. The appellant argued that there was no mala fide intention of concealment, supported by various judgments. The Tribunal noted the appellant's designation as "General Manager (Corporate) and Vice-President (Operation)" in the employer's annual report, indicating no concealment or inaccurate particulars. The penalty was levied despite the appellant's explanations.

Issue 2: Claim of Exemption under section 10(6)(viia) - Tribunal's Analysis:
The appellant, a qualified Chef, claimed exemption under section 10(6)(viia) as a technician. The Tribunal examined the appellant's appointment approval letters, CA certificate, and salary details, finding no concealment of facts. Despite the claim's disallowance, the Tribunal held that the appellant acted under a bona fide belief, supported by evidence, and did not conceal any income or furnish inaccurate particulars. The Tribunal emphasized that the penalty cannot be levied solely based on a claim's disallowance.

Conclusion:
The Tribunal allowed the appeals, setting aside the CIT(A)'s order and deleting the penalty u/s 271(1)(c). The judgment emphasized that despite the appellant's unsuccessful claim for exemption, there was no evidence of concealment or furnishing inaccurate particulars, warranting the penalty.