2015 (10) TMI 5 - AT - Income Tax

Penalty u/s. 271(1)(c) - arrear rent receipts - Held that - As seen that the amount received by the assessee was compensation for illegal occupation of the premises by the Ministry of Defence. The appellant has stated that there was no fraud or concealment of any income and all the facts had been disclosed truly and correctly before the authorities and the Hon ble Courts. It has been stated that addition was made only on account of difference of interpretation between the Department and the assessee. It is seen that in the present case that there is no concealment of facts or filing of inaccurate particulars. There exist no conditions which should attract penal provisions. It is also seen that all the relevant and material facts are well within the knowledge of the department, High Courts and other authorities. It was the Ld. CIT(A) observation that this is a case where there is only a difference of interpretation and opinion. Hence, it is felt that these cases do not fall within the purview of section 271(1)(c). Hence, the penalty imposed is deleted - Decided in favour of assessee.

Summary

Issues Involved:
Appeal against penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 for assessment years 1989-90, 1990-91, 1991-92, 1992-93, 1993-94, 1995-96, 1996-97 & 1994-95.

Analysis:

1. Common Issues in Appeals:
The appeals by the Revenue challenged separate orders of the Ld. Commissioner of Income Tax (Appeals) for various assessment years. The Tribunal decided to consolidate the appeals due to common issues.

2. Grounds Raised in Appeal:
The main ground of appeal was the deletion of the penalty of Rs. 24,61,047/- imposed under section 271(1)(c) of the Income Tax Act, 1961. The facts of the case were not in dispute between the parties.

3. Assessee's Appeal:
The Assessee appealed before the Ld. First Appellate Authority, who allowed the appeal by deleting the penalty imposed by the Assessing Officer. The Revenue was aggrieved by this decision and filed an appeal.

4. Contentions of the Revenue:
The Departmental Representative argued that the penalty was justified as the Assessee had failed to furnish accurate particulars of income. The ITAT confirmed that the arrear rent receipts were treated as revenue receipts, leading to the penalty imposition.

5. Assessee's Defense:
The Assessee's counsel contended that there was no concealment of facts or filing of inaccurate particulars. They argued that the penalty should not be imposed unless the conditions of section 271(1)(c) were met, such as lack of substantiation, absence of bonafide explanation, and non-disclosure of relevant facts.

6. Tribunal's Decision:
After considering the arguments and records, the Tribunal upheld the Ld. CIT(A)'s decision to delete the penalty. It was noted that the Assessee's conduct did not warrant the penalty under section 271(1)(c) as there was no concealment of income. The Tribunal cited relevant case laws to support its decision.

7. Legal Precedents Considered:
The Tribunal referred to the Supreme Court's decision in CIT vs. Reliance Petro Products Ltd. and Hindustan Steel vs. State of Orissa to justify its ruling on the penalty imposition. The Tribunal emphasized that penalty should not be imposed for technical breaches or genuine differences in interpretation.

8. Final Decision:
Consequently, the Tribunal dismissed all eight appeals filed by the Revenue, upholding the deletion of the penalty. The order was pronounced on 10/11/2014 in favor of the Assessee.

This detailed analysis outlines the key arguments, decisions, and legal principles considered in the judgment regarding the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 for the mentioned assessment years.