2016 (12) TMI 1009 - AT - Income Tax

Penalty levied u/s 271(1)(c) - difference in interest income diclosure - Held that - On a careful consideration of the facts, we find that there is no willful attempt to evade taxes by the assessee as the assessee has already returned substantial income in the return. The contention of assessee that he had acted bona fide based on the TDS certificates issued by Bank of Baroda appears to be genuine. In the circumstances, we find that there is no concealment of income or furnishing of inaccurate particulars of income by the assessee. The authorities below have not proved that the explanation given by the assessee is neither false nor genuine. Thus, we delete the penalty levied u/s 271(1)(c) of the Act. - Decided in favour of assessee

Summary

Issues:
Penalty under section 271(1)(c) of the Act for alleged concealment of income.

Analysis:
The appeal was filed against the penalty levied under section 271(1)(c) of the Act for Assessment Year 2009-10. The Assessing Officer made an addition to the total income of the assessee based on the difference between the interest on fixed deposits from Bank of Baroda as per AIR information and the amount shown by the assessee in the return. The assessee accepted the difference during the assessment proceedings. Subsequently, penalty proceedings were initiated, and the Assessing Officer levied a penalty stating that there was a wilful omission on the part of the assessee. The CIT(A) upheld the penalty, noting that the revised TDS certificate submitted by the assessee during the assessment proceedings contradicted the claim of reliance on the bank's certificates. The assessee contended that there was no deliberate concealment of income and relied on the bank's certificates for reporting the interest income.

The assessee argued that the bank did not issue corrected TDS certificates matching the AIR information. The assessee maintained that the revised income statement submitted during the assessment proceedings did not constitute corrected TDS certificates. The assessee provided detailed explanations and documents regarding the interest income reported, tax deducted, and reliance on bank certificates. The assessee claimed that the discrepancy was due to reliance on the bank's certificates and lack of access to Form 26AS at the time of filing the return. The assessee cited legal precedents to support the contention that there was no deliberate attempt to evade taxes.

Upon review, the Tribunal found that the assessee reported the interest income based on the certificates issued by the bank and that the amount matched the TDS certificates. The Tribunal considered the lack of access to Form 26AS at the time of filing the return and the genuine belief of the assessee in relying on the bank's certificates. It was concluded that there was no willful attempt to evade taxes, as substantial income was already declared in the return. The Tribunal held that the explanation provided by the assessee was genuine and ruled in favor of the assessee, deleting the penalty imposed under section 271(1)(c) of the Act.

In conclusion, the Tribunal allowed the appeal, emphasizing that there was no concealment of income or furnishing of inaccurate particulars by the assessee. The decision highlighted the genuine belief of the assessee in relying on the bank's certificates and the lack of evidence proving any deliberate attempt to evade taxes.