2020 (4) TMI 785 - AT - Income Tax

Rectification u/s 254 - Levy of penalty u/s 271(1)(c) - whether the assessee is guilty of 'concealment of particulars of income' or 'furnishing of inaccurate particulars of such income' - HELD THAT - In the penalty order, the AO has given a clear finding that the assessee is found guilty of furnishing inaccurate particulars of income to the extent of ₹ 17.80 lacs. Therefore, there is a clear and specific finding by the AO while passing the penalty and we thus see no mistake in the findings of the Tribunal in terms of incorrect appreciation of facts on record. Regarding suo-moto filing of revised computation, the matter has been duly dealt with by the Tribunal and relevant findings given at Para 11 of its order and we see no basis to interfere with the same as it would tantamount to review of the order of the Tribunal which is not permissible within the narrow compass of section 254(2) - Miscellaneous Application filed by the assessee is dismissed.

Summary

Issues:
Challenge to penalty under section 271(1)(c) of the IT Act on legality and merit.

Analysis:
The assessee filed a miscellaneous application against the order dated 06/12/2018, challenging the penalty imposed under section 271(1)(c) of the IT Act. The contention was that the penalty proceedings were uncertain as the AO used ambiguous language at the initiation stage but later gave a clear finding of furnishing inaccurate particulars of income. It was argued that the penalty order lacked clarity as to the precise charge, which was a mistake apparent on record. The ITAT relied on previous decisions to uphold the penalty, emphasizing the need for a conclusive determination of the charge during penalty proceedings.

Regarding the merit of the penalty, the ITAT found a lack of disclosure regarding the nature of the property, making the assessee ineligible for exemption under section 54. The assessee claimed to have a genuine belief about the eligibility for the deduction, which was not decisively addressed. Additionally, the argument for a reduced penalty based on the tax sought to be evaded was not considered. The assessee sought a revised computation and claimed the deduction under a mistaken belief, which was not adequately addressed by the ITAT.

During the hearing, the DR supported the Tribunal's order, stating that it was well-reasoned and no apparent mistakes existed. The Tribunal, upon review, found that the AO had clearly stated the assessee's guilt of furnishing inaccurate particulars of income in the penalty order. The Tribunal declined to interfere with its previous findings on the suo-moto filing of revised computation, citing the limitations under section 254(2) of the Act. Consequently, the Miscellaneous Application filed by the assessee was dismissed by the Tribunal on 21/02/2020.