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2023 (7) TMI 175 - AT - Income TaxPenalty u/s. 271(1)(c) - treating the returned income in response to the notice u/s. 148 as concealment of income - HELD THAT - There is no concealment of income or furnishing of inaccurate particulars of income attracting the provisions u/s. 271(1)(c) as the assessee made complete disclosure in the return of income and further offered the same for taxation, when that is the case we find the conditions stipulated under the provisions u/s. 271(1)(c) are not satisfied as there was no satisfaction by the AO that the assessee really concealed or furnished inaccurate particulars of income in the return of income. We find the ratio laid down in the case of SAS Pharmaceuticals 2011 (4) TMI 888 - DELHI HIGH COURT which was followed by the Delhi Tribunal in the case of Meeta Gutgutia 2016 (5) TMI 339 - ITAT DELHI holding no penalty is maintainable when there is no variation in the return of income and assessed income. Therefore, taking into consideration the case relied on by the AR and facts and circumstances of the case, we find the ratio of laid down in the case of SAS Pharmaceuticals 2011 (4) TMI 888 - DELHI HIGH COURT which was followed by the Delhi Tribunal in the case of Meeta Gutgutia 2016 (5) TMI 339 - ITAT DELHI are applicable to the facts on hand. Thus, the order of NFAC, Delhi is not justified and ground raised by the assessee is allowed.
Issues involved:
The only issue is whether the CIT(A), NFAC, Delhi was justified in confirming the penalty imposed by the AO u/s. 271(1)(c) of the Act in the case where the returned income was accepted without any addition made by the AO. Summary: Issue 1: Justification of penalty under section 271(1)(c) of the Act The assessee filed a return of income in response to a notice u/s. 148 of the Act, declaring a total income which was accepted by the Revenue. Subsequently, the AO initiated penalty proceedings u/s. 271(1)(c) of the Act, treating the returned income as concealment of income, and imposed a penalty. The NFAC, Delhi confirmed the penalty. The AR argued that since no addition was made by the AO and there was no satisfaction in the assessment order, the penalty imposed was not valid. The AR relied on various judicial decisions to support the argument that penalty cannot be imposed without actual concealment of income or furnishing inaccurate particulars of income. The DR, on the other hand, relied on different judicial decisions to argue in favor of confirming the penalty. The Tribunal noted that there was no variation in the returned income declared by the assessee, which was accepted by the AO. The Tribunal found that the conditions stipulated under section 271(1)(c) of the Act were not satisfied as there was no concealment of income or furnishing of inaccurate particulars of income. Citing the decision of the Hon'ble High Court of Delhi, the Tribunal held that no penalty is maintainable when there is no variation in the return of income and assessed income. Consequently, the Tribunal allowed the appeal of the assessee, finding the NFAC's order unjustified. In conclusion, the Tribunal ruled in favor of the assessee, highlighting the importance of satisfying the conditions under section 271(1)(c) of the Act before imposing a penalty for concealment of income or inaccurate particulars of income.
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