2022 (1) TMI 1199 - AT - Income Tax

Penalty u/s. 271(1)(c) - assessee stated to have been admitted additional income in survey conducted u/s. 133A - CIT-A deleted the addition - HELD THAT - As relying on S.S.M. AHMED HUSSAIN 2017 (8) TMI 929 - MADRAS HIGH COURT , VIPUL LIFE SCIENCES LTD. MUMBAI 2015 (2) TMI 941 - ITAT MUMBAI and VASAVI SHELTERS 2013 (4) TMI 485 - ITAT BANGALORE when assessment is completed on the basis of income declared which is inclusive of additional income declared in the course of survey without making any addition thereon, the penalty u/s. 271(1)(c) of the Act for concealment of income is not warranted. The ld. DR did not dispute that the AO completed assessment on the basis of return of income which is inclusive of the additional income said to have been offered to tax during the course of survey u/s. 133A of the Act. Therefore, we do not find any infirmity in the order of CIT(A) and it is justified. - Decided against revenue.

Summary

Issues:
- Justification of deleting penalty under section 271(1)(c) by CIT(A) for concealment of income.

Analysis:
The appeal before the Appellate Tribunal ITAT Pune was filed by the Revenue against the order passed by the Commissioner of Income Tax (Appeals) for the assessment year 2014-15. The only issue to be decided was whether the CIT(A) was justified in deleting the penalty imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act. The assessee, an individual and a doctor by profession, initially filed a return of income declaring a total income. Subsequently, a survey was conducted which led to the assessee admitting additional income and filing a revised return showing the revised total income. The Assessing Officer accepted the revised return without any disallowance but initiated penalty proceedings for concealment of income. The CIT(A), relying on various precedents, held that when the assessment is completed on the basis of the income declared, inclusive of the additional income offered during the survey, without any further additions, the penalty for concealment of income is not warranted.

The Tribunal noted that the Assessing Officer completed the assessment based on the return of income, including the additional income declared during the survey. The Tribunal found no fault in the CIT(A)'s order and upheld its justification for deleting the penalty. The grounds raised by the Revenue were dismissed, and the appeal was consequently rejected. The order was pronounced in open court on 20th January 2022.