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2023 (5) TMI 575 - AT - Income TaxPenalty u/s 271(1) (c) - assessee voluntarily deposited the tax along with the computation of income in response to the said notice u/s 133(6) - As per AO assessee has not filed the return of income even though she is supposed to do so and has paid the tax and filed return of income only on the issue of notice by the revenue - HELD THAT - The assessee on his own after receiving notice u/s 148 voluntarily declared the income in ROI and paid taxes of thereon i.e. even before providing reason recorded for the escapement of income. The aforesaid explanation given by the assessee through ROI was neither rejected nor it was held to be mala fide by the AO and once the AO had failed to take any objection in the matter, the offer so made came from the assessee on its own and was a voluntary offer made i.e. without any detection and this voluntary action of the assessee cannot be considered as equivalent to providing inaccurate particulars of income or concealing the particulars of Income. See Pushpendra Surana 2013 (8) TMI 969 - RAJASTHAN HIGH COURT as held no inference drawn by the authority that it was a deliberate concealment on the part of the assessee and it could not be considered that there was an inaccurate particulars of income that was made the basis for inflicting penalty upon the assessee in exercise of powers conferred u/s 271(1)(c). Since the assessee participated in the assessment proceeding, has paid the tax, and filed the computation of income before issue of notice u/s. 148 levy of penalty is not sustainable - Decided in favour of assessee.
Issues Involved:
1. Validity of the penalty order under section 271(1)(c) of the Income Tax Act, 1961. 2. Whether the penalty imposed for concealment of income is justified. 3. Specificity and validity of the show cause notice issued under section 274. 4. Applicability of judicial precedents and principles to the facts of the case. Summary: Issue 1: Validity of the Penalty Order under Section 271(1)(c) The assessee contested the penalty order dated 21.01.2020 under section 271(1)(c) of the Income Tax Act, 1961, arguing it was "bad in law and on facts of the case, for want of jurisdiction and various other reasons." The Tribunal noted that the assessee, an elderly widow, had filed her return of income (ROI) on 29.04.2019 in response to a notice under section 148, declaring an income of Rs. 12,95,940/-. The Assessing Officer (AO) accepted this ROI and initiated penalty proceedings under section 271(1)(c) for concealment of income. Issue 2: Justification of the Penalty for Concealment of Income The assessee argued that the penalty was unjustified as her ROI was accepted without any additions. The AO, however, imposed a penalty of Rs. 2,40,795/- for "concealment of particulars of income." The CIT(A) upheld the penalty, noting that the assessee had not filed her return of income despite having income above the taxable limit. The Tribunal observed that the assessee had paid the due taxes and filed her ROI voluntarily before the issuance of the notice under section 148, which indicated no intention to conceal income. Issue 3: Specificity and Validity of the Show Cause Notice under Section 274 The assessee contended that the show cause notice under section 274 was vague and did not specify whether the penalty was for "concealment of particulars of income" or "furnishing inaccurate particulars of income." The Tribunal referred to the Bombay High Court's decision in Smt. Kaushalya Devi and Others, which held that non-striking of redundant words in the notice does not vitiate penalty proceedings if the specific charge is clear in the assessment order. The Tribunal found that the AO had clearly initiated the penalty for "concealment of particulars of income" in the assessment order. Issue 4: Applicability of Judicial Precedents and Principles The assessee cited various judicial precedents, including CIT vs. Pushpendra Surana and Reliance Petro Products (P) Ltd., to argue that no penalty should be imposed when the ROI filed in response to a notice under section 148 is accepted without additions. The Tribunal agreed, noting that the assessee's voluntary payment of taxes and filing of ROI before the notice under section 148 indicated no concealment or furnishing of inaccurate particulars. The Tribunal quashed the penalty, aligning with the jurisdictional High Court's decision in CIT vs. Pushpendra Surana. Conclusion: The Tribunal allowed the appeal, quashing the penalty of Rs. 2,40,795/- under section 271(1)(c), concluding that the penalty was not sustainable given the facts and circumstances of the case. The decision was pronounced in the open court on 17/04/2023.
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