2017 (3) TMI 1947 - AT - Income Tax

Penalty u/s 271(1)(c) - AO on scrutiny of the information available in AIR and ITS noticed that the assessee was paid technical service fees which had not been declared by the assessee in her return of income - in the proceedings before the AO u/s 271(1)(c) assessee pointed out that there was a mistake at the time of filing the return of income and there was no intention whatsoever to conceal any particulars of income - HELD THAT - It is not in dispute that the amount in question was received by the assessee by way of cheque and that the payee had duly deducted tax at source on the payment made to the assessee. Thus the tax due and payable on the income in question has already reached the coffers of the revenue. When the fact that the receipt from M/s. Crisil Ltd was not disclosed in the return of income was confronted to the assessee, she immediately agreed to the addition and also appraised the AO that non disclosure of the said receipt in the return of income was inadvertent and not willful. This circumstance clearly show that there was neither an attempt to conceal particulars of income by the assessee nor to furnish inaccurate particulars thereof. We therefore accept the plea of the assesse and hold that in the facts and circumstances of the case imposition of penalty u/s 271(1)(c) of the Act was not called for. We therefore cancel the order imposing penalty and allow the appeal of the assessee.

Summary

Issues:
- Challenge to penalty imposition under section 271(1)(c) of the Income Tax Act, 1961 for non-disclosure of income received as technical service fees from M/s. Crisil Ltd.
- Validity of the penalty imposed by the Assessing Officer (AO) and confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)].
- Whether non-disclosure of income was deliberate or inadvertent.
- Consideration of the assessee's explanation and circumstances of the case in determining the imposition of penalty.

Analysis:
1. The appeal was filed by the Assessee against the order of the CIT(A) confirming the penalty imposed by the AO under section 271(1)(c) of the Income Tax Act, 1961 for non-disclosure of income received as technical service fees from M/s. Crisil Ltd for the assessment year 2009-10.

2. The AO initiated penalty proceedings based on the non-disclosure of the sum paid by M/s. Crisil Ltd to the Assessee. The Assessee admitted the receipt and agreed to the addition of the sum to her total income. However, the Assessee contended that the non-disclosure was a mistake and not intentional, especially since tax had been deducted at source by M/s. Crisil Ltd.

3. The AO rejected the Assessee's explanation, emphasizing that had the return not been scrutinized, the income would not have been disclosed. On appeal, the CIT(A) upheld the AO's decision, leading to the Assessee's appeal before the Tribunal.

4. During the Tribunal proceedings, neither the Assessee nor a representative appeared. The Tribunal considered the AO and CIT(A)'s orders, along with the circumstances of the case. It noted that the income in question was received through a cheque with tax deducted at source, ensuring the revenue received the tax due. The Assessee promptly agreed to the addition upon discovery, attributing the non-disclosure to inadvertence rather than willful intent.

5. The Tribunal accepted the Assessee's explanation, concluding that there was no deliberate attempt to conceal income or provide inaccurate particulars. Therefore, it held that the imposition of penalty under section 271(1)(c) was unwarranted in the given circumstances. Consequently, the Tribunal canceled the penalty order, allowing the Assessee's appeal.

6. Ultimately, the Tribunal allowed the Assessee's appeal, emphasizing the lack of willful intent in the non-disclosure of income and the prompt acceptance of the addition upon discovery. The Tribunal's decision was based on the absence of deliberate concealment or furnishing of inaccurate particulars by the Assessee, leading to the cancellation of the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961.