2019 (1) TMI 1339 - AT - Income Tax

Penalty levied u/s.271(1)(c) - because of the questionnaire issued by the Assessing Officer asking the assessee to file revised return that all the details of the transactions was incorporated therein which was not there in the original return of income by the assessee - Held that - In the penalty order, we find that it is admitted by the Assessing Officer himself that from transactions the income received has been credited to the P & L Account of the assessee. This facts signifies that the intention of the assessee was never to defraud the Revenue. The details of the transactions through which the income has been received, was there in the P & L Account of the assessee, which inadvertently not there in the original return of income, however, those were again filed in the revised return of the assessee. There was no deliberate intention from the facts on record which can even hint that the assessee was trying to conceal his income. The books of account especially P & L Account were already filed with the Department. All the transactions from which income earned was mentioned therein. Penalty order is liable to be quashed. - Decided in favour of assessee

Summary

Issues:
Confirmation of penalty under section 271(1)(c) for concealment of income.

Analysis:
The appeal before the Appellate Tribunal ITAT Pune challenged the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961, amounting to ?51,690 for concealment of income. The Tribunal noted that the appeal was time-barred by 245 days but decided to condone the delay in the interest of justice and proceeded to hear the appeal on merits. During the hearing, neither the assessee nor their Authorized Representative was present, only the Ld. DR was in attendance. The case involved an assessment completed under section 143(3) of the Act, where it was discovered that the assessee had not initially included income from certain transactions in the original return. The Revenue argued that the assessee only disclosed the income in a revised return after being prompted by a questionnaire from the Assessing Officer. However, it was acknowledged that the income from the transactions had been credited to the Profit & Loss Account of the assessee, indicating no intention to defraud the Revenue.

The Tribunal examined the facts and circumstances of the case, emphasizing that the details of the transactions were present in the P & L Account of the assessee, albeit not initially included in the original return but later disclosed in the revised return. It was observed that there was no deliberate attempt to conceal income, as all transactions were documented in the books of account submitted to the Department. The Tribunal concluded that the penalty order was unwarranted, as there was no evidence of fraudulent intent on the part of the assessee. Consequently, the Tribunal set aside the order of the CIT(A) and directed the Assessing Officer to delete the penalty. Ultimately, the appeal of the assessee was allowed, and the penalty under section 271(1)(c) was revoked.

In summary, the Tribunal found that the failure to include certain income in the original return was not indicative of intentional concealment, as the transactions were duly recorded in the books of account. The Tribunal emphasized the lack of fraudulent intent on the part of the assessee and deemed the penalty unjustified, leading to the decision to quash the penalty order and allow the appeal.