2015 (10) TMI 584 - AT - Income Tax

Penalty u/s. 271(1)(c) - CIT(A) deleted the addition - Held that - Assessing Officer was unable to bring any evidence indicating that the explanation offered by the assessee was not bonafide or false. It is a difference of opinion between the Assessing Officer and the assessee. The assessee was of the view that since he will receive the receipts for the month of March in April, therefore, he will raise bill in the month of April and account the receipts in the next month. It is a misconception in the mind of assessee but he has not deliberately withheld something from the Assessing Officer. He has accounted these receipts in the next year and rather raised the dispute with regard to credit of the TDS. The next item is an addition on an estimate basis. Again, a debatable point, there is no concrete material on the record which demonstrates that assessee has deliberately concealed the particulars of income or furnished inaccurate particulars. The Ld. First Appellate Authority has righty deleted the penalty. - Decided in favour of assessee.

Summary

Issues: Appeal against deletion of penalty under section 271(1)(c) of the Income Tax Act for Assessment Year 2005-06.

In this case, the Appellate Tribunal ITAT Ahmedabad considered the appeal by the revenue against the deletion of a penalty imposed under section 271(1)(c) of the Income Tax Act for Assessment Year 2005-06. The revenue contended that the Commissioner of Income Tax (Appeals) erred in deleting the penalty of Rs. 7,35,638 imposed by the Assessing Officer. The case involved discrepancies in gross receipts shown by the assessee, leading to additions in income by the Assessing Officer. The Tribunal noted that the Assessing Officer had issued a show cause notice under section 274 r.w.s. 271(1)(c), and the assessee provided explanations for the discrepancies. The Tribunal analyzed section 271(1)(c) of the Act, emphasizing the conditions for imposing penalties related to concealment of income or furnishing inaccurate particulars. The section allows penalties ranging from 100% to 300% of the tax sought to be evaded. The deeming provisions in Explanation 1 to section 271(1)(c) address situations where the assessee fails to offer explanations or offers false explanations. The Tribunal found that the Assessing Officer failed to provide evidence that the assessee's explanations were not bona fide or false. The Tribunal concluded that the discrepancies were due to a difference of opinion rather than deliberate concealment, leading to the deletion of the penalty. The appeal by the revenue was dismissed, upholding the decision to delete the penalty.