2019 (1) TMI 1261 - AT - Income Tax

Penalty levied u/s 271(1)(c) - Failure to disclose the salary received from M/s HCL Technologies Ltd. and also failed to claim the TDS made by the M/s HCL Technologies Ltd. - reasonable cause on the part of the assessee u/s 273B - Held that - Had the assessee claimed TDS made by the M/s HCL Technologies Ltd., then we may say that the assessee has concealed part of income or furnished inaccurate particulars of income. The very fact that the assessee has not claimed TDS made by the M/s HCL Technologies Ltd. shows that there was a reasonable cause on the part of the assessee in not disclosing the salary received from M/s HCL Technologies Ltd. Since the TDS was made by M/s HCL Technologies Ltd., the fact of salary received by the assessee from M/s HCL Technologies Ltd. is very much within the knowledge of the Department. This Tribunal is of the considered opinion that there was reasonable cause on the part of the assessee as provided in Section 273B of the Act. Hence, this is not a fit case for levy penalty under Section 271(1)(c) of the Act. - Decided in favour of assessee.

Summary

Issues:
Penalty under Section 271(1)(c) of the Income-tax Act, 1961 for assessment year 2011-12.

Analysis:
The appeal was against the penalty levied by the Assessing Officer under Section 271(1)(c) of the Income-tax Act, 1961. The appellant did not appear for the hearing, so the Ld. Departmental Representative presented the case. It was noted that the appellant worked for two companies during the assessment year, receiving salaries from both. However, the appellant only disclosed the salary from one company and did not disclose the salary from the other company, nor did he claim the TDS made by that company. The Assessing Officer found that the appellant concealed income, leading to the penalty being upheld by the Commissioner of Income Tax (Appeals).

Upon review, the Tribunal found that the appellant's failure to disclose the salary from the second company and claim the TDS made by them was due to a reasonable cause. The Tribunal noted that since the TDS was made by the second company, the Department was aware of the salary received from them. Therefore, it was concluded that there was a reasonable cause on the part of the appellant for not disclosing the salary from the second company. As per Section 273B of the Act, the Tribunal determined that this was not a suitable case for imposing a penalty under Section 271(1)(c) of the Act.

Consequently, the Tribunal set aside the orders of the lower authorities and deleted the penalty imposed by the Assessing Officer. The appeal filed by the appellant was allowed, and the penalty was removed. The decision was pronounced in court on 21st January 2019 in Chennai.