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2023 (4) TMI 38 - AT - Income TaxPenalty u/s 271(1)(c) - concealment of income of LTCG - HELD THAT - The assessee right from the attending the hearing before assessing officer took the plea that he has already paid the due tax with interest, on the capital gain earned on the sale of his ancestral property. We find merit in the submission of Ld. AR for the assessee that there was no mala fide intention of assessee to evade the tax of conceal part of his income and that assessee before completion of assessment, he accepted such fact and paid due tax - we direct the Assessing Officer to delete the entire penalty levied under section 271(1)(c) of the Act. In the result, the grounds of appeal raised by the assessee are allowed.
Issues Involved:
The appeal against the penalty u/s 271(1)(c) of the Income Tax Act, 1961 for assessment year 2012-13, raised by a Non-Resident Indian (NRI) who acquired permanent Citizenship of Canada. Summary of Judgment: 1. The case involved the penalty levied u/s 271(1)(c) of the Act on the NRI assessee for not filing the return of income for the assessment year 2012-13, despite making deposits and earning interest income. The Assessing Officer added Long Term Capital Gains (LTCG) and interest income to the assessment, leading to the initiation of penalty proceedings. 2. The NRI assessee contended that he was unaware of Indian tax laws regarding capital gains on the sale of immovable property and had paid the due tax along with interest before the completion of assessment. The assessee argued that there was no mala fide intention to evade tax, citing various legal precedents. 3. The CIT(A) upheld the penalty, stating that ignorance of the law is not an excuse, and the assessee could have easily found information on tax implications. The NRI assessee then appealed to the Tribunal. 4. The Tribunal considered the submissions of both parties and various case laws cited by the assessee. It noted that the assessee had voluntarily disclosed the capital gains and paid the due tax before assessment completion, indicating no mala fide intention to evade tax. 5. Relying on legal precedents where penalties were deleted due to voluntary disclosure and payment of tax, the Tribunal held that in this case, the assessee's actions were bona fide. Therefore, the Tribunal directed the Assessing Officer to delete the entire penalty u/s 271(1)(c) of the Act. 6. Consequently, the appeal of the NRI assessee against the penalty was allowed, and the penalty was set aside by the Tribunal.
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