2019 (8) TMI 1124 - AT - Income Tax

Penalty u/s. 271(1)(c) r.w.s 274 - quantum addition deleted - addition made on account of income accrued but not due - HELD THAT - It is pertinent to note that the quantum appeal has been allowed by the Tribunal. Thus, the addition, on which penalty has been imposed by the Revenue does not survive. Therefore, present penalty appeal of the assessee is allowed.

Summary

Issues:
Penalty under section 271(1)(c) of the Income Tax Act, 1961 for inaccurate particulars of income.

Analysis:
1. The appeal was filed against the penalty order passed by the CIT(A) confirming a penalty under section 271(1)(c) of the Income Tax Act, 1961. The appellant contested that the penalty was erroneously confirmed by the CIT(A) for allegedly providing inaccurate particulars of income.

2. The appellant's grounds of appeal included contentions that the CIT(A) erred in confirming the penalty based on a factually incorrect finding regarding the issue of written off TDS, which had been disclosed by the appellant during the assessment proceedings.

3. The appellant also argued that the penalty confirmation overlooked the fact that the company had voluntarily revised its Return of Income, claiming the amount of TDS recoverable written off. The appellant emphasized that the mere rejection of a claim does not necessarily imply the filing of inaccurate particulars of income.

4. Furthermore, the appellant contended that the penalty confirmation was unjust as it was based on a genuine difference of opinion between the appellant and the assessing authority, regarding the treatment of TDS written off, which should not be equated with providing inaccurate particulars of income.

5. The appellant raised procedural issues, alleging that the CIT(A)'s order was invalid and contrary to the provisions of section 275(1)(a) of the Act, citing a specific High Court decision. Additionally, the appellant challenged the initiation of penalty proceedings under section 271(1)(c) by the CIT(A).

6. The assessment had initially disallowed certain amounts, including written off TDS, leading to the initiation of penalty proceedings under section 271(1)(c). However, subsequent rectification by the Assessing Officer resulted in the deletion of some additions, which were considered concealed income, prompting the imposition of the penalty.

7. The Tribunal noted that the quantum appeal had been allowed, thereby nullifying the basis for the penalty imposed by the Revenue. Consequently, the Tribunal allowed the penalty appeal of the assessee, as the addition on which the penalty was based no longer stood valid.

8. Ultimately, the Tribunal allowed the appeal of the assessee, emphasizing that the addition, which formed the basis for the penalty, had been overturned in the quantum appeal, thereby rendering the penalty unjustified.

This comprehensive analysis highlights the key contentions, procedural aspects, and outcomes of the judgment, providing a detailed overview of the legal issues involved in the case.