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Issues involved: The judgment involves the levy of penalty u/s. 271(1)(c) of the Income Tax Act for assessment years 2003-04 to 2005-06.
Assessment Year 2003-04: The only issue in this appeal is the levy of penalty u/s. 271(1)(c) for non-disclosure of income from other sources in the original return. The Assessing Officer (A.O.) initiated penalty proceedings, observing that the assessee did not rectify the mistake in the original return by filing a revised return u/s. 139(5) and declared the income only after a notice u/s. 148 was issued. The A.O. levied a penalty, stating that the assessee concealed income, making him liable for penalty u/s. 271(1)(c). The Commissioner of Income Tax (C.I.T.) upheld the penalty, emphasizing that the assessee concealed income by not including interest income in the original return, even though it was later disclosed in response to the notice u/s. 148. The ITAT Kolkata, after considering the submissions, found that the revenue did not point out that income had escaped due to non-declaration of interest, and the assessee voluntarily offered the income upon receiving the notice u/s. 148. As there was no evidence to support the claim that the department detected the income, the ITAT directed the A.O. not to levy the penalty u/s. 271(1)(c), allowing the assessee's appeal. Assessment Years 2004-05 & 2005-06: The facts for these assessment years are similar to the issue in the assessment year 2003-04. The ITAT directed the A.O. to delete the penalties levied u/s. 271(1)(c) for these two assessment years as well, based on the same reasoning as in the assessment year 2003-04. In conclusion, the ITAT Kolkata allowed the appeals of the assessee for all the assessment years, directing the A.O. to delete the penalties imposed u/s. 271(1)(c) for non-disclosure of income, as the assessee voluntarily offered the income upon receiving notices u/s. 148 without evidence of detection by the department.
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