2018 (6) TMI 1179 - AT - Income Tax

Penalty u/s. 271 (1)(c) - assessee has omitted to include interest income from Government of India Bonds in return of income - voluntary filling revised return - Held that - Assessee has omitted to include interest income from Government of India Bonds by mistaken belief of the facts - no reason for the AO to levy penalty u/s 271(1)(c) for furnishing inaccurate of income more so when the assessee has voluntarily filed revised statement of total income including interest received on Government of India Bonds before completion of assessment. This legal proposition is further supported by the decision of Hon ble Supreme Court in the case of Suresh Chandra Mittal 2001 (6) TMI 63 - SUPREME COURT wherein the Hon ble Supreme Court held that voluntary surrender of income cannot be considered as concealment of particulars of income or furnishing of inaccurate particulars of income. - decided in favour of assessee.

Summary

Issues:
Penalty under section 271(1)(c) for furnishing inaccurate particulars of income.

Analysis:
1. The assessee filed the return of income for AY 2011-12 but did not include interest received from Government Bonds, leading to penalty proceedings under section 271(1)(c).
2. The Assessing Officer (AO) initiated penalty proceedings and levied a penalty of ?55,713, which was 100% of the tax sought to be evaded.
3. The assessee contended that the omission of interest income was inadvertent and rectified by filing a revised statement of total income before the completion of assessment.
4. The CIT(A) upheld the penalty, stating that the assessee had concealed income by not including the interest from Government Bonds in the return.
5. The assessee appealed to the Appellate Tribunal, arguing that the penalty was unjust as the omission was unintentional and rectified voluntarily.
6. The Appellate Tribunal noted that the assessee had rectified the mistake before the assessment was completed and had no intention to evade tax.
7. Citing the decision of the Supreme Court in CIT vs Suresh Chandra Mittal, the Tribunal held that the penalty under section 271(1)(c) could not be justified in this case.
8. Consequently, the Tribunal directed the AO to delete the penalty under section 271(1)(c), and the appeal filed by the assessee was allowed.

This detailed analysis of the legal judgment outlines the sequence of events, arguments presented by the parties, and the reasoning behind the Tribunal's decision to delete the penalty under section 271(1)(c) based on the inadvertent nature of the omission and the voluntary rectification made by the assessee before the completion of assessment.