2017 (1) TMI 573 - AT - Income Tax

Penalty levied u/s 271(1)(c) - revised return of income offering additional income on own before any notice was issued by the Department - allegation of the Department that only because in an investigation conducted by the Department, it was found that assessee has not disclosed income from share transaction she was compelled to file return of income offering additional income - Held that - The explanation of the assessee that having become aware of the fact that income from share transaction have not been offered in these assessment years she voluntarily came forward to file revised return of income offering additional income appears plausible. It is also a fact on record that revised returns of income filed by the assessee are prior to issuance of any notice by the Department. It is also a fact to be taken note of that apart from the additional income offered in the revised return of income Department has not assessed any other income. In other words, the income offered in the revised return of income was accepted by the Department without any variation. It is pertinent to note here that in assessment years 2007-08 and 2008-09, wherein the Department was in possession of information regarding non-disclosure of income by the assessee from share transactions, the income declared by the assessee from such transaction in the revised return of income has ultimately been accepted by the Department in assessment s completed under section 143(3) and assessee s claim that no proceedings for imposition of penalty under section 271(1)(c) have been initiated remains uncontroverted by the Department. In the aforesaid facts and circumstances, in our opinion, it cannot be said that filing of revised return of income by the assessee offering additional income is not voluntary. Therefore, on consideration of overall facts and circumstances, we are of the view that there being no conscious or deliberate act on the part of the assessee to either conceal particulars of income or furnish inaccurate particulars of income imposition of penalty under section 271(1)(c) is uncalled for. - Decided in favour of assessee

Summary

Issues Involved:
1. Confirmation of penalty levied under Section 271(1)(c) of the Income-tax Act, 1961.
2. Voluntary disclosure of income by the assessee.
3. Comparison with the case of the assessee's sister and the applicability of the Tribunal's decision.

Issue-wise Detailed Analysis:

1. Confirmation of Penalty Levied Under Section 271(1)(c) of the Income-tax Act, 1961:
The primary issue in this case revolves around the confirmation of a penalty amounting to ?3,13,540/- levied by the Assessing Officer (AO) under Section 271(1)(c) of the Income-tax Act, 1961. The penalty was imposed on the grounds that the assessee had concealed particulars of income and furnished inaccurate particulars. The AO's decision was based on the fact that the assessee filed a revised return of income after the detection of undisclosed bank accounts and DEMAT accounts by the Revenue. The initial return filed by the assessee did not disclose these accounts, leading to the initiation of penalty proceedings.

2. Voluntary Disclosure of Income by the Assessee:
The assessee argued that the revised return of income was filed voluntarily before any notice for re-opening of the assessment under Section 148 of the Act was issued. The assessee contended that there was no conscious or deliberate intention to conceal income or furnish inaccurate particulars. The revised return was filed on 15th January 2009, declaring an income of ?11,23,860/- after paying self-assessment tax. However, the AO observed that the revised return was filed only after the Revenue's investigation and detection of undisclosed transactions, and hence, it could not be considered a voluntary disclosure.

3. Comparison with the Case of the Assessee's Sister and Applicability of Tribunal's Decision:
The assessee's counsel cited a similar case involving the assessee's sister, where the Tribunal had deleted the penalty levied under Section 271(1)(c). In the case of the assessee's sister, the Tribunal found that the revised return of income was filed voluntarily before any notice was issued by the Department, and the additional income offered was accepted without any variation. The Tribunal held that there was no conscious or deliberate act to conceal income or furnish inaccurate particulars, and thus, the imposition of penalty was not justified.

Tribunal's Decision:
The Tribunal, after considering the rival contentions and the material available on record, found that the facts of the present case were identical to those in the case of the assessee's sister. The Tribunal observed that the revised return of income was filed voluntarily before any notice was issued by the Department, and the additional income offered was accepted without any variation. The Tribunal held that there was no conscious or deliberate act to conceal income or furnish inaccurate particulars, and thus, the imposition of penalty under Section 271(1)(c) was not justified.

The Tribunal ordered the deletion of the penalty of ?3,13,540/- levied by the AO under Section 271(1)(c) of the Act and allowed the appeal filed by the assessee.

Conclusion:
In conclusion, the Tribunal allowed the appeal filed by the assessee, ordering the deletion of the penalty levied under Section 271(1)(c) of the Income-tax Act, 1961, on the grounds that the revised return of income was filed voluntarily before any notice was issued by the Department, and there was no conscious or deliberate act to conceal income or furnish inaccurate particulars. The Tribunal's decision was based on the precedent set in the case of the assessee's sister, where similar facts and circumstances were involved.