2018 (1) TMI 1327 - AT - Income Tax

Penalty u/s 271(1)(c) - concealment of income or furnishing of inaccurate particulars of income - Held that - In the instant case, nothing is on record to show that there was any malafide intention on the part of the assessee to conceal the income or furnish inaccurate particulars of income and there was an omission while filing the return of income which was rectified through challan on the very date of passing the assessment order. But the entire exercise cannot be brought to the ambit of penalty under section 271(1)(c). We are, therefore, of the considered view that this penalty should be cancelled and we order cancellation of penalty. - Decided in favour of assessee.

Summary

Issues:
Imposition and confirmation of penalty under section 271(1)(c) of the Income-tax Act, 1961.

Detailed Analysis:

1. Issue of Penalty Imposition:
The main issue in this case revolves around the imposition and confirmation of a penalty of ?70,768 under section 271(1)(c) of the Income-tax Act. The Assessing Officer imposed the penalty based on the belief that the assessee did not disclose income from the sale of property in the return and only paid taxes after receiving a notice under section 148. The crux of the matter lies in whether this omission constitutes deliberate concealment or furnishing of inaccurate particulars of income.

2. Judicial Pronouncements and Assessee's Defense:
The assessee, in defense, cited various judicial pronouncements to support the argument that the omission was a bona-fide mistake due to the complexities of income tax provisions. The assessee contended that the immediate payment of taxes upon realizing the mistake, without challenging the assessment order, demonstrated a lack of malafide intent. The key argument was that there was no loss to the Revenue, and the omission was rectified promptly.

3. Decision of the CIT(A) and Appellate Tribunal:
The ld. CIT(A) upheld the penalty, but the Appellate Tribunal took a different view. The Tribunal observed that the behavior of the assessee, promptly rectifying the omission upon receiving notice under section 148, indicated a lack of deliberate concealment. The Tribunal emphasized that in the absence of malafide intent and with no loss to the Revenue, the penalty under section 271(1)(c) could not be justified. Therefore, the Tribunal ordered the cancellation of the penalty, ruling in favor of the assessee.

4. Conclusion:
In conclusion, the Appellate Tribunal allowed the appeal of the assessee, canceling the penalty imposed under section 271(1)(c) of the Act. The Tribunal's decision was based on the absence of malafide intent, the immediate rectification of the omission, and the lack of loss to the Revenue. The judgment highlights the importance of bona-fide mistakes and prompt corrective actions in determining the applicability of penalties under income tax laws.