2012 (7) TMI 550 - AT - Income Tax

Penalty u/s 271(1)(c) of the I.T. Act - penalties on additional income offered in the respective returns filed by the assessee in response to notice u/s 153A of the Act Held that - Penalty u/s 271(1)(c) is not imposable where there is neither concealment of income nor furnishing of inaccurate particulars of income in return filed u/s 153A of the Act - concealment of income is to be determined with reference to the return of income to be filed in response to notice u/s 153A of the Act. Once returned income filed u/s 153A is accepted by the assessing officer it can neither be a case of concealment of income nor furnishing of inaccurate of particulars of such income - appeals of the assessee get accepted

Summary

Issues:
Challenge against penalties imposed under section 271(1)(c) of the I.T. Act, 1961 for assessment years 2001-02 & 02-03.

Analysis:
The appeals were directed against penalties confirmed by CIT(A) for the mentioned assessment years. The assessee argued that penalties on additional income disclosed in response to notice u/s 153A were wrongly imposed. The assessee cited a similar case where penalties were deleted by the ITAT, Delhi, and requested for the penalties to be deleted in this case as well due to identical facts and issues.

The Revenue, supported by decisions from various High Courts, sought confirmation of the penalties. It was clarified that in the cited cases, revised returns were filed, and no additional income was disclosed in response to notice u/s 153A. However, the authorities relied on upheld the penalties.

Upon review, it was found that additional income was disclosed in returns filed in response to notice u/s 153A for both assessment years. Reference was made to a precedent where the High Court clarified that penalties under section 271(1)(c) are not applicable if there is no concealment or inaccurate particulars in the return filed u/s 153A. The amended provisions of Explanation 5 and 5A were discussed, emphasizing their applicability based on the date of search initiation.

The Tribunal concluded that penalties were not justified based on the facts and circumstances of the case, following the earlier decision. Since no contrary material was presented, and the issue was covered, the penalties were directed to be deleted for both assessment years. The appeals of the assessee were accepted accordingly.