2018 (2) TMI 1708 - AT - Income Tax

Penalty proceedings u/s. 271(1)(c) - validity of notice issued u/s 274 - addition of the capital gain arising from the transfer of the capital asset - contention of the assessee is that the transaction was not detected by the revenue it was volunteer disclosure of the assessee during the assessment proceedings - Held that - AO has charged the assessee for twin defaults. Under the facts of the present case same is rightly done as the assessee has concealed the income arose out of transfer of capital asset and failed to disclose the capital gain in its return of income that tantamount of furnishing of inaccurate particulars of income. We therefore do not see any infirmity into the order of the authorities below. - Decided against assessee

Summary

Issues:
- Appeal against order of Commissioner of Income Tax (Appeals)
- Penalty imposition under section 271(1)(c) of the Income Tax Act, 1961

Analysis:

Issue 1: Appeal against order of Commissioner of Income Tax (Appeals)
The case involved two appeals by different assesses against the orders of the Commissioner of Income Tax (Appeals) - Ghaziabad. The appeals were consolidated due to identical grounds and arising from the same transaction. The first appeal, ITA No. 5752/Del/2015 for assessment year 2010-11, focused on the non-disclosure of capital gain arising from the transfer of a property in the return of income. The assessing officer made an addition for the undisclosed capital gain and initiated penalty proceedings under section 271(1)(c) of the Act. The appellant argued that the disclosure was voluntary during assessment proceedings and claimed it was a bona fide mistake. However, the tribunal rejected these arguments, emphasizing that the non-disclosure constituted furnishing inaccurate particulars of income, justifying the penalty imposition.

Issue 2: Penalty imposition under section 271(1)(c) of the Income Tax Act, 1961
The primary contention in both appeals was against the confirmation of penalty under section 271(1)(c) of the Act. The appellants argued that the penalty was unjustified as the undisclosed income was voluntarily disclosed during assessment proceedings and there was no mal intention. However, the tribunal held that the assessing officer correctly charged the assessee for concealing income arising from the property transfer and failing to disclose the capital gain. The tribunal dismissed the appeals, stating that the penalty imposition was valid as the non-disclosure amounted to furnishing inaccurate particulars of income. The tribunal emphasized the importance of adhering to tax laws and rejected the arguments of the appellants regarding the penalty imposition.

In conclusion, the tribunal dismissed both appeals, upholding the penalty imposition under section 271(1)(c) of the Income Tax Act, 1961. The judgment highlighted the significance of accurate disclosure of income and rejected the appellants' arguments regarding the voluntariness of disclosure and lack of mal intention.