2011 (1) TMI 1473 - AT - Income Tax

Summary

Issues involved: Appeal against penalty u/s 271(1)(c) of I.T. Act for AY 2002-03.

Summary:

Issue 1: Penalty u/s 271(1)(c) for undisclosed income:
The assessee filed a return declaring total income of &8377; 69,880, but the assessment was completed at &8377; 10.07 lacs after certain additions. The main contention was the disclosure of &8377; 8 lacs as separate income during a survey. The Tribunal found that the income was disclosed in the return filed later and not concealed, thus penalty u/s 271(1)(c) was not justified.

Issue 2: Penalty u/s 271(1)(c) for estimation of income:
The remaining assessed income was based on estimation due to rejection of books of account. The Revenue failed to prove any bogus expenditures or non-genuine claims. Merely because some expenses were incurred through a sister concern does not warrant penalty u/s 271(1)(c). The Tribunal emphasized that penalty should only be levied for actual concealment or furnishing inaccurate particulars, not based on the quantum of assessed income. As no evidence of concealment was found, the penalty of &8377; 4,58,240 was deleted.

In conclusion, the Appellate Tribunal ITAT Ahmedabad ruled in favor of the assessee, deleting the penalty u/s 271(1)(c) of the Income-tax Act for Assessment Year 2002-03.