2020 (11) TMI 824 - AT - Income Tax

Direct Tax Vivad Se Vishwas Scheme - assessee has opted to settle the dispute relating to the tax arrears for the assessment year under consideration- HELD THAT - We have seen the letter dated 17.11.2020 along with Form 1 and 2 filed with income tax department. Considering the aforesaid situation, the present appeal is dismissed. However, this dismissal of appeal is subject to a caveat that in case the dispute relating to tax arrears for the present assessment year is not ultimately resolved in terms of the aforesaid Scheme, the assessee shall be at liberty to approach the Tribunal for reinstitution of the appeal and the Tribunal shall consider such application as per law. The Revenue has no objection with regard to the aforesaid caveat. Appeal of the assessee is dismissed.

Issues:
1. Appeal against penalty under section 271(l)(c) of the Income Tax Act, 1961.
2. Violation of natural justice in passing the order.
3. Application of mind in imposing penalty.
4. Disclosure of material facts.
5. Penalty on debatable legal issues.
6. Applicability of Explanation 1 of section 271(l)(c) of the Act.
7. Settlement under "The Direct Tax Vivad Se Vishwas Scheme", 2020.

Analysis:
1. The appeal was filed against the penalty of INR 19,21,920 levied under section 271(l)(c) of the Income Tax Act, 1961. The appellant contended that the order confirming the penalty was bad in law. The grounds of appeal included challenges to the order passed by the Commissioner of Income Tax (Appeals) for lack of opportunity to be heard, passing the order in haste, and not specifying the basis for imposing the penalty.

2. The appellant argued that the order was arbitrary and violated the principles of natural justice as the Assessing Officer passed an ex-parte order without providing a sufficient opportunity to be heard. The appellant claimed that the order was made in haste without due consideration.

3. The appellant raised concerns regarding the application of mind by the Assessing Officer in imposing the penalty under section 271(l)(c) of the Act. It was contended that the penalty was imposed without proper consideration and without specifying whether it was for concealing particulars of income or furnishing inaccurate particulars of income.

4. The appellant asserted that all material facts relating to the claim were fully and truly disclosed, and the penalty for furnishing inaccurate particulars of income was unjustified. The Commissioner of Income Tax (Appeals) was criticized for confirming the penalty without appreciating the disclosed facts.

5. The appellant argued that the penalty could not be levied on additions made in the assessment order on debatable or vexed legal issues. It was contended that the penalty under section 271(l)(c) could not be imposed in such circumstances.

6. The appellant challenged the confirmation of the penalty for furnishing inaccurate particulars of income under Explanation 1 of section 271(l)(c) of the Act. It was argued that the explanation was applicable only when particulars of income were concealed, which was not the case here.

7. The appellant opted to settle the dispute relating to tax arrears for the assessment year under "The Direct Tax Vivad Se Vishwas Scheme", 2020. The appeal was dismissed, subject to the condition that if the dispute was not resolved under the scheme, the appellant could approach the Tribunal for reinstitution of the appeal.

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