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2021 (10) TMI 1152 - AT - Income TaxLevy of penalty u/s 271(1)(c) - return of income was filed belatedly - HELD THAT - Admittedly, there is no variation between the returned income and assessed income. Though the return of income was filed belatedly, nevertheless it is return of income under the provisions of section 139 of the Act and the findings of CIT(A) that the penalty is not leviable u/s 271(1)(c) of the Act is based on correct appreciation of facts and law governing the levy of penalty in the facts of present case. It is settled position of law that the penalty u/s 271(1)(c) of the Act is leviable with reference to concealment in the return of income. See NA MALBARY AND BROTHERS 1963 (11) TMI 5 - SUPREME COURT and ONKAR SARAN AND SONS 1992 (3) TMI 1 - SUPREME COURT In the absence of any variation between returned income and assessed income, no penalty u/s 271(1)(c) of the Act can be levied. Hence, we do not find any merit in the appeal filed by the Revenue. Accordingly, the appeal filed by the Revenue stands dismissed.
Issues:
Appeal against deletion of penalty u/s 271(1)(c) for A.Y. 2013-14. Analysis: The Revenue appealed against the deletion of a penalty of ?62,54,166 under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 2013-14. The grounds of appeal included the contention that the penalty was wrongly deleted without considering that the assessee disclosed unaccounted income during a survey action. The Revenue argued that the disclosed income was not part of the books of accounts and would have escaped assessment without the survey. The Revenue also cited a Supreme Court decision to support the imposition of the penalty. The respondent, a partnership firm engaged in the business of builders, filed its income tax return for the relevant year declaring total income of ?2,02,40,024. The assessment was completed by the Assessing Officer accepting the returned income but initiating penalty proceedings under section 271(1)(c) based on a survey operation conducted on the business premises. During the survey, it was found that the firm received on-money consideration, which was later admitted in a belated return filed by the firm. The AO held that the income would not have been disclosed without the survey and imposed the penalty based on concealment of income. The CIT(A), however, deleted the penalty by noting that there was no variation between the returned and assessed income. The CIT(A) relied on decisions of the Delhi and Madras High Courts to support the deletion of the penalty. The Revenue, aggrieved by this decision, appealed the matter. During the appeal hearing, the Revenue argued that the income would not have been detected without the survey operation, invoking a Supreme Court decision. On the other hand, the respondent relied on the CIT(A)'s order. The Tribunal considered the issue of the penalty under section 271(1)(c) and noted that there was no variation between the returned and assessed income. Referring to established legal principles and previous court decisions, the Tribunal concluded that in the absence of such variation, no penalty could be levied. Therefore, the appeal filed by the Revenue was dismissed, upholding the deletion of the penalty. In conclusion, the Tribunal dismissed the Revenue's appeal against the deletion of the penalty under section 271(1)(c) for the assessment year 2013-14, emphasizing the importance of the absence of variation between the returned and assessed income in determining the levy of penalties under the Income-tax Act.
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