2023 (8) TMI 876 - AT - Income Tax

Penalty u/s 271(1)(c) - assessee in response to the notice u/s 148 has offered capital gain and paid taxes thereon - HELD THAT - We are conscious of the facts that assessment in the present case in completed u/s 147. Going by the language of section 148, that any such return filed under this section, replace his original return of income, for such purpose, such returned filled is treated as return filed u/s 139. We find that the ratio case of Kirit Dahyabhai Patel 2015 (1) TMI 201 - GUJARAT HIGH COURT and is squarely applicable on the facts of the present case. Hence, we direct the Assessing Officer to delete the penalty levied u/s 271(1)(c) . As the assessee in the return of income in response to the notice u/s 148 has offered capital gain and paid tax, thus grounds of appeals raised by the assessee are allowed.

Summary

Issues involved:
The appeal challenges the penalty imposed by the Assessing Officer u/s 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2008-09.

Summary:

Issue 1: Failure to Appear for Hearing

The appeal was initially decided ex parte as the assessee did not appear, but was later reopened. Despite multiple opportunities, the assessee failed to appear for the hearing, submitting written arguments instead.

Issue 2: Penalty for Concealment of Income

The Assessing Officer initiated penalty proceedings u/s 271(1)(c) alleging that the assessee concealed income by not disclosing Long Term Capital Gains (LTCG) in the original return of income. The assessee argued that the return filed in response to the notice under section 148 should be considered as the original return, relying on relevant case law.

Issue 3: Adjudication of Penalty

The Assessing Officer levied a penalty of Rs. 2,61,800/-, citing the alleged concealment of income. The assessee contended that there was no intention to evade tax and that the LTCG was disclosed and taxed. The CIT(A) upheld the penalty, but the Tribunal found in favor of the assessee based on the interpretation of relevant legal provisions and case law.

Key Points:

- The Tribunal directed the Assessing Officer to delete the penalty imposed u/s 271(1)(c) based on the applicability of the decision in a jurisdictional High Court case.
- The Tribunal distinguished the present case from a previous case relied upon by the CIT(A) based on the different circumstances and actions of the assessee.
- The Tribunal allowed the appeal of the assessee, emphasizing the importance of proper interpretation of legal provisions and relevant case law.