2015 (2) TMI 1099 - AT - Income Tax

Penalty u/s 271(1)(c) - addition in respect of non-deduction of tax - CIT(A) deleted the penalty - Held that - The factum of deletion of addition in respect of non-deduction of tax by the assessee is not controverted by the ld. CIT-DR. Therefore, we do not see any reason to interfere with the order of the ld. CIT(A) deleting the penalty on this amount.- Decided against revenue Additional income declared in consequence to the survey action - Held that - We find that the fact that the penalty is levied on the amount which was reflected in the original return as income. The ld. CIT(A) has followed the decision of this Bench of the Tribunal rendered in the case of DCIT Vs. Dr. Satish B Gupta (2010 (8) TMI 641 - ITAT, AHMEDABAD ). Ld. CIT-DR has contended that the CIT(A) failed to appreciate the fact that the additional income was declared in consequence to the survey action by the Revenue. However, it is not disputed by the ld. CIT DR that the assessee has declared this income in his original Return of Income, although it was belated return. As per provisions of Section 271(1)(c), penalty can be imposed if the assessee has concealed the particulars of income or furnishing the inaccurate particulars of such income. There is no dispute with regard to the fact that the particulars of income are reflected in the Return of Income. It is not the case of the Revenue that the returns of income filed were invalid. In fact, the Assessing Officer has proceeded on the basis of the returns filed by the assessee and particulars furnished therein. Therefore, we do not see any good reason to interfere with the order of the ld. CIT(A) which is hereby confirmed. - Decided against revenue

Summary

Issues:
- Penalty under section 271(1)(c) deleted by CIT(A)
- Concealment of income during survey operation
- Addition made on non-payment of TDS
- Disclosure of income in original return

Analysis:
The case involved an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals)-VI, Ahmedabad, regarding the deletion of penalty under section 271(1)(c) amounting to Rs. 2,81,24,512 for the Assessment Year 2006-07. The Assessing Officer had initiated penalty proceedings during the assessment under section 143(3) of the Income-tax Act, making various disallowances and additions. The penalty was imposed, leading to an appeal by the assessee before the CIT(A), who directed the penalty to be deleted. The Revenue, aggrieved by this decision, appealed to the ITAT.

The Revenue contended that the CIT(A) erred in deleting the penalty, emphasizing a survey operation conducted at the assessee's premises where additional income was offered. The Revenue argued that the deliberate act of concealing income should not be overlooked, as without the survey action, the income would have escaped assessment. On the other hand, the assessee's counsel argued that the penalty was unjustified, highlighting that the additions made were disclosed in the original return, and any non-payment of TDS was subsequently deleted by the ITAT.

Upon hearing both parties and examining the records, the ITAT found that the addition related to non-deduction of tax by the assessee had been deleted by the ITAT in a previous order. The ITAT also noted that the penalty was imposed on an amount already reflected in the original return as income. Referring to a previous Tribunal decision, the ITAT confirmed that penalty under section 271(1)(c) could only be imposed for concealing or furnishing inaccurate particulars of income, which was not the case here. The ITAT upheld the CIT(A)'s decision, emphasizing that the income particulars were disclosed in the return, and the returns filed were valid, leading to the rejection of the Revenue's appeal.

In conclusion, the ITAT rejected the Revenue's appeal, confirming the deletion of the penalty under section 271(1)(c) by the CIT(A) for the Assessment Year 2006-07.