2021 (1) TMI 80 - AT - Income Tax

Penalty levied u/s 271(1)(c) - case selected for scrutiny under CASS with the reason suspicious Long Term Capital Gain - assessee suo moto surrendered an amount before any of the authorities of the Income Tax pointed out any undisclosed income of the assessee - furnishing of inaccurate particulars of income - HELD THAT - As decided in assessee's Sister in law Smt. Neelu Garg 2019 (4) TMI 1666 - ITAT CHANDIGARH the assessee suo moto surrendered an amount and paid the due tax alongwith interest thereon much before the Investigation Wing or the A.O. pointed out any discrepancy about the undisclosed or concealed income of the assessee. Considering all the impugned penalty levied by the A.O. u/s 271(1)(c) of the Act and sustained by the CIT(A) was not justified. Accordingly, the same is deleted. This finding has been given by considering the peculiar facts of the present case, therefore, it is made clear that it may not be considered as a precedent in the other cases. - Appeal of the assessee is allowed.

Summary

Issues:
Challenge to penalty under section 271(1)(c) of the Income Tax Act, 1961.

Detailed Analysis:

1. Issue: Challenge to penalty under section 271(1)(c) of the Income Tax Act, 1961.

- The appeal was against the sustenance of a penalty of ?11,43,300 levied by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961.

- The Assessee contended that the penalty was unjustified and arbitrary. The Counsel for the Assessee highlighted a similar case involving the Assessee's sister-in-law, where the penalty was deleted by the ITAT Chandigarh 'SMC' Bench.

- The Assessee had voluntarily surrendered an amount before any discrepancy was pointed out by the authorities. The ITAT Chandigarh 'SMC' Bench had previously held that in such cases, where income was voluntarily disclosed, the penalty under section 271(1)(c) was not justified.

- The Tribunal, considering the similarities in facts between the Assessee's case and the earlier case of the sister-in-law, held that the penalty under section 271(1)(c) was not justified. The penalty was deleted based on the peculiar facts of the case and was not to be considered a precedent for other cases.

- The Tribunal allowed the appeal of the Assessee and deleted the penalty under section 271(1)(c) of the Income Tax Act, 1961.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive overview of the arguments presented, the legal precedents cited, and the final decision rendered by the Tribunal.