2013 (2) TMI 220 - HC - Income Tax

Penalty u/s 271(1)(c) - furnishing of inaccurate particulars - assessee voluntarily offered Rs.30,63,310/- for tax. - It was stated that the amount was shown in the capital account and was not shown as a capital receipt. But since the issue had arisen, it was being offered as taxable income. - held that - The admitted position is that the amount of Rs.30,63,310/- was shown by her in the return. That being the position, it cannot be said that there was any concealment. There is no dispute about the fact that the amount was correctly mentioned and therefore, there is also nothing inaccurate in the particulars furnished by her. The only error that seems to have been committed was that it was not shown as a capital receipt. But as soon as this was pointed out, the error was accepted and the amount was surrendered to tax. - No penalty - Decided in favor of assessee.

Summary

Issues:
Assessment of undisclosed income | Imposition of penalty for inaccurate particulars and concealment of income

Assessment of Undisclosed Income:
The case involves an appeal by the Revenue against an order passed by the Income Tax Appellate Tribunal regarding the assessment year 2004-05. The assessee, a professional international tennis player, declared a total income of Rs. 94,605 but did not offer Rs. 30,63,310 received as awards for tax initially. The Assessing Officer accepted the return but later reopened the assessment, leading to the voluntary declaration of the undisclosed amount for taxation. The Assessing Officer accepted this amount as taxable income and imposed the corresponding tax. However, a penalty of Rs. 10,14,582 was also imposed on the grounds of furnishing inaccurate particulars and concealing income.

Imposition of Penalty for Inaccurate Particulars and Concealment of Income:
The Commissioner of Income Tax (Appeals) upheld the penalty decision, but the Tribunal disagreed. The Tribunal found that the failure to declare the amount was due to a bona fide mistake by the assessee's Advocate/Chartered Accountant and not deliberate concealment. The Tribunal noted that the amount was disclosed in the statement of affairs and initially accepted by the Assessing Officer under Section 143(1) of the Income Tax Act. The Tribunal concluded that there was no concealment or furnishing of inaccurate particulars, leading to the decision that the penalty was unwarranted. The High Court concurred, stating that since the amount was correctly mentioned, there was no concealment or inaccuracy in the particulars furnished. The Court emphasized that the error was promptly rectified by offering the amount for tax upon realization of the oversight. Consequently, the Court held that this was not a case suitable for penalty imposition. The appeal was dismissed, and no substantial question of law was found to arise for consideration.

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