2019 (9) TMI 347 - AT - Income Tax

Penalty u/s 271(1)(c) - employer issued revised TDS certificate with additional salary u/s 192 - Assessee filed the income tax return based on the old TDS certificate issued by the employer - revise return was filed after the case was selected for scrutiny - AO initiated the penalty proceedings on the ground that low income was declared - HELD THAT - Explanation offered by assessee is bonafide to take it out of clutches of the penalty proceedings as no attempt is made by assessee to furnish inaccurate particulars of income nor an attempt is made by assessee to conceal his income more-so there is no prejudice to the Revenue as further income-tax of Rs. 5, 00, 000/- was deducted at source by employer Pace u/s 192 on behalf of assessee on additional salary income of Rs. 16, 63, 897/- paid to assessee on 24.09.2013 for impugned ay 2013-14 within provisions of Section 192 Revised statement of income-tax deducted at source u/s 192 of the 1961 Act in quarterly returns filed with Revenue in Form No. 24Q wherein all the information pertaining to additional salary of Rs. 16, 63, 897/- and additional TDS paid of Rs. 5, 00, 000/- stood disclosed to Revenue. - Decided in favour of assessee

Summary

Issues:
Challenge to penalty of Rs. 5,14,145/- levied under section 271(1)(c) of the Income-tax Act, 1961 for assessment year 2013-14.

Detailed Analysis:

Issue 1: Penalty under section 271(1)(c)
The appeal was filed against the penalty order dated 29.07.2016 passed by the Assessing Officer (AO) under section 271(1)(c) of the Income-tax Act, 1961. The penalty of Rs. 5,14,145/- was confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)]. The primary contention was the failure of the assessee to declare additional salary and TDS while filing the original return of income for the assessment year 2013-14.

Analysis:
The assessee initially declared income of Rs. 1,26,63,460/- in the return filed on 27.03.2014, including salary income of Rs. 15,00,000/- from Pace Aftermarket Private Limited. The issue arose when a revised Form No. 16 was issued by the employer, Pace, showing additional salary income of Rs. 16,63,897/- and additional TDS of Rs. 5,00,000/-. The assessee, based on the old Form No. 16, filed the return of income without including the revised figures. However, during assessment proceedings, the assessee voluntarily disclosed the additional income and TDS. The Tribunal accepted the explanation provided by the assessee as bonafide and genuine, considering that there was no attempt to furnish inaccurate particulars of income or conceal income. The revised computation of income was filed before the AO, rectifying the initial error made in the return filed in March 2014.

Conclusion:
The Tribunal, after careful consideration of all relevant documents and explanations, ordered the deletion of the penalty of Rs. 5,14,145/- imposed under section 271(1)(c) of the Income-tax Act, 1961. The case of the assessee was deemed to be covered by Explanation 1 to the provisions of Section 271(1)(c), which exempted the assessee from the penalty. The appeal of the assessee was allowed for the assessment year 2013-14.