2015 (3) TMI 1169 - AT - Income Tax

Penalty levied under section 271(1)(c) - Held that - Although the assessee has shown income from the profession of consultancy to the tune of ₹ 14,62,000/- however, as per AIR information income under this head was found to be ₹ 15,65,336 /- which shows that there was deliberately and intentional concealment on the part of the asessee and similarly, the interest income received by the assessee as per AIR was ₹ 75,190/- which was not offered for taxation although it was the assessee himself who has kept the deposits in his bank, it cannot be held that there was bonafide mistake on the part of the assessee. The CIT(A) also while deciding the issue has categorically mentioned that there is no doubt that the assessee did not disclose different sources of income which come to the notice of AO through AIR information and in the facts of the present case the asessee had not brought any facts or explanation before us in order to show that there was some bonafide mistake on the part of the assesse to conceal the said income. Since, the assessee failed to discharge his basic onus to prove before us or before the revenue authorities that the mistake on the part of assessee was bonafide and therefore not reflected the said income in the return of income. Therefore, the CIT(A) has rightly upheld the order imposing penalty u/s 271(1)(c) passed by AO. - Decided against assessee.

Issues:
1. Confirmation of penalty under section 271(1)(c) of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeals).
2. Alleged intentional concealment of income by the assessee.
3. Application of legal precedents in determining intentional concealment.

Issue 1: Confirmation of Penalty under Section 271(1)(c)
The Appellate Tribunal considered the appeal filed by the Assessee against the order of the Commissioner of Income Tax (Appeals) confirming the penalty levied under section 271(1)(c) of the Income Tax Act, 1961. The Assessee argued that the penalty was confirmed without appreciating the facts and written submissions made during the penalty proceedings. The Tribunal examined the contentions raised by both parties and noted that the Assessee did not submit any explanation in response to the penalty notice issued by the Assessing Officer. The Tribunal observed that the Assessee accepted the concealed income during the assessment proceedings, as disclosed by AIR information. Despite the Assessee's claim of inadvertent errors due to lack of familiarity with Indian tax laws, the Tribunal held that ignorance of the law is not an excuse. The Tribunal upheld the Commissioner's decision to impose the penalty under section 271(1)(c), concluding that there was intentional concealment on the part of the Assessee.

Issue 2: Alleged Intentional Concealment of Income
The Tribunal analyzed the case where the Assessee failed to disclose the full income received from consultancy services and interest income from bank deposits. The Assessee argued that the non-disclosure was due to lack of knowledge about Indian tax laws and non-receipt of relevant documents from the bank. However, the Tribunal emphasized that the Assessee's duty was to disclose all relevant information at the time of filing the return. The Tribunal distinguished the case from legal precedents cited by the Assessee, highlighting that the facts were not similar. Despite the Assessee's reliance on judgments, the Tribunal found deliberate concealment of income based on AIR information discrepancies. The Tribunal noted that the Assessee failed to prove any bona fide mistake in concealing income, leading to the confirmation of the penalty by the Commissioner of Income Tax (Appeals).

Issue 3: Application of Legal Precedents
The Assessee relied on various judgments to support the argument of inadvertent errors and lack of intentional concealment. However, the Tribunal differentiated the facts of those cases from the present situation, emphasizing the deliberate concealment of income by the Assessee. The Tribunal concluded that the Assessee's failure to provide a valid explanation or demonstrate a bona fide mistake led to the dismissal of the appeal. The Tribunal upheld the penalty imposed under section 271(1)(c) by the Assessing Officer, as confirmed by the Commissioner of Income Tax (Appeals), based on the intentional concealment of income by the Assessee.

In conclusion, the Appellate Tribunal dismissed the Assessee's appeal, upholding the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 for intentional concealment of income. The Tribunal emphasized the Assessee's obligation to disclose all income sources and rejected the argument of inadvertent errors or lack of knowledge about tax laws as valid excuses for non-disclosure.

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