2015 (9) TMI 1395 - HC - Income Tax

Penalty under section 271(1)(c) - whether amounts disclosing after search, which was not previously offered to tax is not a concealment on the part of the respondent/assessee ? - Held that - The manner in which the income was derived has also been disclosed and the assessee has thereafter paid the tax and the applicable interest, thus all the requirements of the clause were met by the assessee and, therefore, the correct view of the matter in allowing the immunity and upholding the setting aside the order of penalty passed by AO. See Commissioner of Income-Tax, Central-I, Kolkata vs. Amardeep Singh Dhanjal 2013 (2) TMI 291 - CALCUTTA HIGH COURT and Commissioner of Income Tax, Central-III, Kolkata vs. Brijendra Gupta 2015 (7) TMI 451 - CALCUTTA HIGH COURT - Decided in favour of assessee.

Summary

Issues:
1. Whether the Income Tax Appellate Tribunal erred in upholding the order of Commissioner of Income Tax (Appeal) regarding amounts not previously offered to tax.
2. Whether the Income Tax Appellate Tribunal erred in upholding the order of Commissioner of Income Tax (Appeal) regarding the levy of penalty under section 271(1)(c) of the Income Tax Act for the Assessment Years 2003-04 to 2005-06.

Analysis:
1. The first issue revolved around the Tribunal's decision on whether the amounts disclosed after a search, which were not previously offered to tax, constituted concealment by the respondent/assessee. The Court referred to unreported judgments delivered in similar cases, specifically highlighting the judgments in ITA 39 of 2010 and ITA 330 of 2009, which favored the assessee. The Court noted that the Tribunal had relied on a previous order that had been affirmed by the High Court. After hearing arguments from both parties, the Court concluded that the issue was covered by previous judgments and answered it in the negative, against the revenue and in favor of the assessee.

2. The second issue dealt with whether the Assessing Officer was justified in levying a penalty under section 271(1)(c) of the Income Tax Act for the relevant assessment years. Similar to the first issue, the Court found that this question was also covered by judgments in ITA 39 of 2010 and ITA 330 of 2009, which had ruled in favor of the assessee. Consequently, the Court answered this question in the negative, against the revenue and in favor of the assessee. As a result, the appeal was dismissed based on the precedents set by the previous judgments delivered by the Court in similar cases.