2015 (10) TMI 2319 - AT - Income Tax

Levy of penalty u/s. 271(1)(C) - undisclosed income which was disclosed by the Assessee and accepted by the Return in the return of income - A.R. submitted that during the course of survey, no incriminating material or evidences were impounded and the aforesaid statement has been controverted by Revenue by placing any material on record - Held that - Considering the fact that Assessee had made the disclosure of income in the revised return of income and the AO has also accepted the same and in view of the fact that during the courses of survey, no incriminating material was found and since Revenue has not found actual concealment of income or furnishing of inaccurate particulars of income in the return of income, we are of the view that no penalty u/s. 271(1)(c) would be attracted in the present case. We further draw support from the decision of Hon ble Gujarat High Court in the case of Kirit Dayabhai Patel vs. Act (2015 (1) TMI 201 - GUJARAT HIGH COURT) where the Hon ble High Court has even in the case where income was shown in the return filed u/s. 153 of the Act has held that no penalty u/s. 271(1)(c) is leviable. - Decided in favour of assessee.

Summary

Issues:
- Appeal against order of CIT(A) for A.Y. 2009-10
- Levy of penalty u/s. 271(1)(c) for undisclosed income

Analysis:
1. Appeal against CIT(A) Order:
The Assessee, a partnership firm engaged in construction work, filed an appeal against the order of CIT(A) confirming a penalty of Rs. 45.50 lakhs levied by the Assessing Officer (A.O) under section 271(1)(c) of the Income Tax Act. The Assessee argued that the penalty was illegal, unlawful, and against natural justice. The grounds raised included errors in considering explanations and evidence, as well as the applicability of the penalty provisions. The Assessee contended that the penalty should be deleted as there was no act of furnishing inaccurate particulars of income.

2. Levy of Penalty u/s. 271(1)(c):
The main issue revolved around the levy of penalty under section 271(1)(c) on the undisclosed income of Rs. 1.20 crores declared by the partner during a survey. The Assessee revised the return of income voluntarily, which was accepted by the A.O without any additions. The penalty was imposed by the A.O for allegedly furnishing inaccurate particulars of income. The Assessee argued that no inaccurate particulars were furnished, and no incriminating material was found during the survey. The Assessee relied on various case laws to support their argument against the penalty. The Tribunal observed that since the Assessee disclosed the income in the revised return, which was accepted by the A.O, and no incriminating material was found during the survey, the penalty under section 271(1)(c) was not justified. The Tribunal referred to a decision of the Gujarat High Court to support its conclusion.

3. Decision:
After considering the submissions and evidence, the Tribunal allowed the Assessee's appeal, concluding that no penalty under section 271(1)(c) should be levied in the present case. The Tribunal emphasized the lack of actual concealment of income or furnishing of inaccurate particulars in the return of income. The decision was based on the principle that if income was disclosed and accepted without any concealment, the penalty should not be imposed. The appeal of the Assessee was allowed, and the penalty was deleted.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by the parties, and the Tribunal's decision based on the facts and legal principles applied in the case.