2019 (4) TMI 1669 - AT - Income Tax

Levy of penalty u/s 271(1)(c) - salary income and rental income were subjected to TDS - assessee did not file his return of income originaly and only pursuance to notice issued u/s 148, filed his return of income and paid additional tax - HELD THAT - There is no dispute that the salary income and rental income were subjected to TDS. It is true that the assessee did not file his return of income and only pursuance to notice issued u/s 148 the assessee filed his return of income. It is equally true that the assessment has been framed on the returned income itself though the notice u/s 148 was issued on the information that the assessee has made agreement for purchase of immovable property for a consideration of ₹ 10.21 lakhs with Shweta Estate Pvt Ltd. I find that no addition has been made in this respect as the Assessing Officer himself is satisfied with the reply of the assessee. When the assessed income and the returned income are same, no reason to hold that the assessee has concealed its particulars of income, since both the incomes were subjected to TDS. This to be a fit case for levy of penalty u/s 271(1)(c) - Decided in favour of assessee.

Summary

Issues:
Levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961.

Analysis:
The appeal was filed by the assessee against the order of the Commissioner of Income Tax [Appeals] confirming the penalty under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 2010-11. The penalty proceedings were initiated based on the assessment order framed under section 143(3) r.w.s. 147 of the Act. The Assessing Officer observed a difference between the total TDS amount and the total tax paid by the assessee, leading to the levy of a penalty amounting to ?76,674. The assessee contended that the returned income and assessed income were the same, indicating no concealment of income to evade tax.

During the proceedings, the ld. AR argued that since the assessed income and returned income were identical and both incomes were subjected to TDS, there was no concealment of income. On the other hand, the ld. DR supported the Assessing Officer's findings. The Tribunal considered the facts and noted that both the salary and rental income were subjected to TDS. Even though the return of income was filed only after receiving a notice under section 148, the assessed income remained the same as the returned income. The Tribunal found no grounds to conclude that the assessee had concealed income, especially when both incomes were under TDS scrutiny. Consequently, the Tribunal directed the Assessing Officer to delete the penalty of ?76,674.

In conclusion, the Tribunal allowed the appeal filed by the assessee, highlighting that when the assessed and returned incomes are the same and both incomes were subjected to TDS, there is no basis to uphold the penalty under section 271(1)(c) of the Income-tax Act, 1961.