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Issues:
1. Penalty under section 271(1)(c) of the Income Tax Act, 1961 for filing two returns simultaneously. 2. Bona fide belief of the assessee in filing two returns. 3. Assessment of penalty amounting to Rs. 2,314. 4. Justification for canceling the penalty. Analysis: The appeal before the Appellate Tribunal ITAT Chandigarh challenged the penalty of Rs. 2,314 imposed under section 271(1)(c) of the Income Tax Act, 1961 for filing two returns simultaneously. The assessee initially declared income in one return, which was accepted by the Income Tax Officer. However, it was later discovered that the assessee had also filed a separate return with a different income declaration. The Income Tax Officer brought the share income from the second return to tax, resulting in the penalty. The assessee contended that the second return was filed due to a misunderstanding and not with the intention to evade tax. The Tribunal noted that the assessee's actions were based on a bona fide belief and there was no deliberate attempt to avoid tax. The Tribunal highlighted that the assessee's disclosure of investments from the previous firm in the second return indicated transparency and lack of mala fide intent. In the penalty proceedings, the assessee argued that filing two returns was an honest mistake and not a deliberate attempt to evade tax. The Income Tax Officer, however, imposed the penalty, stating that the failure to comply with the notice under section 148 showed a deliberate attempt to avoid higher tax. The Tribunal disagreed with this assessment, emphasizing that the assessee's actions were not driven by a desire to evade tax but rather by a genuine misunderstanding. The Tribunal found no malice or intent to defraud the authorities, leading to the cancellation of the penalty amount of Rs. 2,314. During the proceedings, the Tribunal considered the arguments presented by both the assessee's representative and the Revenue. After a thorough examination of the facts and circumstances, the Tribunal concluded that the assessee's filing of two returns was a mistake arising from a bona fide belief. The Tribunal observed that penalizing the assessee for a minor tax amount would be unjust, given the lack of any malicious intent or deliberate tax evasion. The Tribunal emphasized the transparency shown by the assessee in disclosing the source of investments, further supporting the conclusion that the actions were not aimed at tax avoidance. Ultimately, the Tribunal allowed the appeal, overturning the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961. The Tribunal noted that the case did not involve complex legal issues or precedents and relied on a factual analysis to reach its decision. The absence of any cited case law indicated that the matter primarily revolved around the interpretation of facts and the assessee's intent in filing two returns. The Tribunal's decision to cancel the penalty was based on the assessment of the assessee's genuine belief and lack of fraudulent motives, ultimately leading to the allowance of the appeal.
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