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2018 (6) TMI 1400 - HC - Income TaxPenalty u/s 271(1)(c) - Concealment of income - assessee s agreement on addition - Held that - This appeal is squarely covered by the Co-ordinate Bench Judgment of this Court in the case of Commissioner of Income Tax v. Manjunatha Cotton & Ginning Factory and Others 2013 (7) TMI 620 - KARNATAKA HIGH COURT merely because the assessee agreed for addition and accordingly assessment order was passed on the basis of this addition and when the assessee has paid the tax and the interest thereon in the absence of any material on record to show the concealment of income - it cannot be inferred that the said addition is on account of concealment - the assessee has offered the explanation - The said explanation is not found to be false - On the contrary it is held to be bonafide No concealment on the part of the Assessee, attracting penalty under Section 271 1 c of the Act. Such cogent and reasonable findings of facts by the learned Tribunal and consequentially set aside the penalty under Section 271 1 c of the Act does not give rise to any substantial question of law requiring consideration by this Court under Section 260-A of the Act. - Decided in favour of assessee.
Issues:
Appeal filed by Revenue under Section 260-A of the Income Tax Act, 1961 challenging the Order of the Income Tax Appellate Tribunal setting aside penalty imposed on the Assessee for Assessment Year 2009-10. Analysis: 1. Alleged Substantial Question of Law: The Revenue filed an appeal under Section 260-A of the Income Tax Act, 1961, challenging the Order of the Income Tax Appellate Tribunal that set aside the penalty imposed on the Assessee. The Tribunal found no concealment on the part of the Assessee, concluding that penalty under Section 271[1][c] was not warranted. The Tribunal's factual findings were considered cogent and reasonable, leading to the dismissal of the appeal by the High Court. 2. Precedent and Interpretation of Law: The Counsel for the Revenue acknowledged that the controversy in the present case was similar to a Co-ordinate Bench Judgment of the Karnataka High Court in the case of 'Commissioner of Income Tax v. Manjunatha Cotton & Ginning Factory and Others'. The said judgment emphasized that the mere agreement of the Assessee to an addition in the assessment order, without any material showing concealment of income, does not automatically imply concealment. The Tribunal's decision to cancel the penalty was deemed justified, especially when the explanation provided by the Assessee was considered bona fide and not false. 3. Validity of Penalty Proceedings: The High Court reiterated that the Tribunal's finding of no concealment by the Assessee was crucial in determining the validity of the penalty proceedings under Section 271[1][c] of the Act. It was emphasized that the order of penalty should be based on the appellate authority's decision, not solely on the Assessing Officer's order. In this case, since the Tribunal was satisfied with the Assessee's explanation and found it to be bona fide, the levy of penalty was deemed unjustified. 4. Conclusion and Dismissal of Appeal: Based on the above analysis, the High Court found the Revenue's appeal to be without merit and consequently dismissed it. The Court highlighted that the Tribunal's reasoned findings of fact supported the decision to set aside the penalty under Section 271[1][c] of the Act. The judgment concluded by stating that no costs were awarded, and a copy of the Order would be sent to the Respondent-Assessee for reference.
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