2017 (6) TMI 782 - AT - Income Tax

Levy of penalty u/s 271(1)(c) - Withdrawal of claim of deduction under section 24(a) - Held that - In this case the assessee has filed revised return of income withdrawing the deduction claimed under section 24(a). No case has been made out that this revision was done on account of any query on the impugned subject. Furthermore we note that when assessing officer in the assessment order is finding the assessee guilty for furnishing of inaccurate particulars of income the assessing officer in the penalty order is holding that assessee has concealed income. In our considered opinion assessee has sought to revise the computation and withdrawn the claim of deduction under section 24(a). In our considered opinion the assessee s conduct was bonafide and it was not contumacious to warrant levy of penalty under section 271(1)(c). - Decided in favour of assessee.

Summary

Issues:
Levy of penalty under section 271(I)(c) for revised computation of income.

Analysis:
The appeal was against the order of the Ld. CIT-A confirming the levy of penalty under section 271(I)(c) for a sum of ?12,23,908 due to a revised computation of income under 'Income from Other Sources' instead of 'Income from House Property'. The assessing officer initiated proceedings for inaccurate particulars of income and a wrong claim, holding that the assessee concealed taxable income.

Upon hearing both parties, the Tribunal noted that the assessee revised the return by withdrawing the deduction claimed under section 24a without any query on the subject. The assessing officer found the assessee guilty of furnishing inaccurate particulars of income in the assessment order but held that the assessee concealed income in the penalty order. The Tribunal deemed the assessee's conduct as bonafide and not contumacious, setting aside the lower authorities' orders and deleting the penalty levy under section 271(I)(c).

The Tribunal concluded that the assessee's revision of the computation and withdrawal of the deduction under section 24a were done in good faith, without any intention to conceal income. Therefore, the appeal filed by the assessee was allowed, and the penalty was deleted. The order was pronounced in the Open Court on 30/05/2017.