2019 (9) TMI 867 - AT - Income Tax

Penalty levied u/s 271(1)(c) - assessee had filed return u/s 153A - HELD THAT - The revenue has not brought any contrary binding precedent to our notice. It is transpired from the assessment order that the assessee has filed the return for the first time u/s 153A of the Act and no return was filed before initiation of search. Therefore, in terms of section 153A of the Act, return filed u/s 153A of the Act would be deemed to be return filed u/s 139 of the Act and all consequential provisions would apply. The Ld. D.R. has not rebutted this fact. I therefore, respectfully following judgement of Hon ble Gujarat High Court rendered in the case of Kirit Dahyabhai Patel Vs. ACIT 2015 (1) TMI 201 - GUJARAT HIGH COURT and other case laws as relied by the assessee, direct the A.O. to delete the penalty. The appeal of the assessee is allowed.

Summary

Issues:
- Appeal against penalty levied under section 271(1)(c) of the Income Tax Act, 1961.

Analysis:

Issue 1: Penalty under section 271(1)(c)
The appeals challenged the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961. The contention was that since the income declared in the return filed under section 153A was the same as the assessed income, no penalty should be levied. The argument was supported by various decisions, including those of ITAT, Delhi High Court, and Gujarat High Court. The key point was that the return filed under section 153A should be considered as the return filed under section 139 for penalty purposes. The Tribunal referred to previous cases and held that in the absence of any incriminating documents found during the search, the undisclosed income addition was based on the statement furnished under section 132(4) of the Act.

Issue 2: Judicial Precedents
The judgment relied heavily on judicial precedents such as the decision of the Honorable Gujarat High Court in the case of Kirit Dahyabhai Patel and the Honorable Delhi High Court in the case of Neeraj Jindal. These precedents emphasized that the return filed under section 153A should be treated as the return filed under section 139 for penalty assessment. The Tribunal found that the revenue failed to present any contrary binding precedent to challenge this interpretation.

Issue 3: Consistency in Decisions
The Tribunal maintained consistency in its decisions regarding the penalty levied under section 271(1)(c) for all three appeals. It noted that the facts and circumstances were identical in each case, and the arguments presented were the same. Consequently, the Tribunal allowed the appeals in all three cases based on the reasoning provided in the first appeal.

In conclusion, the Tribunal allowed the appeals filed by the assessees against the penalties imposed under section 271(1)(c) for the Assessment Year 2012-13. The judgment highlighted the importance of considering the return filed under section 153A as the assessed income for penalty assessment purposes, based on relevant judicial precedents and the absence of incriminating documents during the search.