2014 (5) TMI 769 - AT - Income Tax

Deletion of penalty u/s 271(1)(c) of the Act Agricultural income added in revised return Held that - Unless actual concealment of income or furnishing of inaccurate particulars of income is found from the return of income, penalty cannot be imposed - the assessee has made complete disclosure of income in the revised return and the AO has also accepted such income, provisions of sec. 271(1)( c) will not be attracted as imposition of penalty u/s 271(1)(c ) can only be considered on the basis of income tax return Relying upon Commissioner Of Income Tax Versus Suresh Chandra Mittal 2001 (6) TMI 63 - SUPREME Court - when income declared by the assessee is accepted no penalty can be imposed u/s 271(1)(c) of the Act the order of the CIT(A) is upheld Decided against Revenue.

Summary

Issues:
Penalty imposed u/s 271(1)(c) of the Act for assessment year 2006-07.

Analysis:

1. Imposition of Penalty by Assessing Officer:
The appeal was against the penalty imposed by the Assessing Officer under section 271(1)(c) of the Act for the assessment year 2006-07. The assessee, a doctor by profession, initially declared income in the return, but after a survey conducted under section 133A, filed a revised return admitting additional income. The Assessing Officer initiated penalty proceedings despite the assessee's explanation that they cooperated with the department based on an assurance during the survey. The penalty was imposed despite the assessee's cooperation and payment of taxes.

2. CIT (A) Decision and Rationale:
The CIT (A) considered the submissions and deleted the penalty. The CIT (A) observed that the assessee voluntarily filed the revised return within the stipulated time, and the Assessing Officer did not provide specific evidence of concealed income. The CIT (A) noted similarities with the preceding year's case where the penalty was also deleted. The CIT (A) emphasized that without proof of concealment, penalty under section 271(1)(c) cannot be sustained.

3. ITAT Decision and Legal Precedents:
The ITAT reviewed the arguments presented by both parties. It was highlighted that the revised return was filed based on the survey's outcome, but the acceptance of the income by the Assessing Officer without variation was crucial. The ITAT referenced legal precedents, including the decision of the Hon'ble Supreme Court in Suresh Chandra Mittal vs. CIT, to support the contention that when the declared income is accepted, penalty cannot be imposed. The ITAT also noted that in a previous case for the assessee, the penalty was deleted under similar circumstances.

4. Confirmation of CIT (A) Decision:
Considering the facts and the consistent approach of the Tribunal in the assessee's previous case, the ITAT confirmed the CIT (A) decision to delete the penalty. The ITAT emphasized that without concrete evidence of concealment, penalty under section 271(1)(c) cannot be upheld. The ITAT dismissed the appeal, affirming the deletion of the penalty by the CIT (A) for the assessment year 2006-07.

In conclusion, the judgment focused on the lack of evidence of concealment and the acceptance of the additional income by the Assessing Officer as key factors in deleting the penalty imposed under section 271(1)(c) for the assessment year 2006-07. The legal precedents cited supported the decision that when the declared income is accepted, penalty for concealment cannot be sustained.