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2024 (6) TMI 1141 - AT - Income TaxIssues: Challenge against penalty order u/s 271(1)(c) for concealing income. Analysis: The appeal was filed against the penalty order imposed by the Assessing Officer (AO) under section 271(1)(c) of the Income Tax Act. The penalty of Rs. 1,21,855 was imposed for concealing income, specifically related to long term capital gain claimed as exempt u/s 10(38) of the Act. The AO initiated penalty proceedings after reopening the case of the assessee, who had initially declared a total income of Rs. 2,13,640. The AO issued a notice stating that the penalty was imposed for concealing income, without clearly framing the charges. The appellate authority dismissed the appeal, stating that the assessee had claimed bogus long term capital gain u/s 10(38) of the Act. Upon review, the Appellate Tribunal found that the assessee had disclosed all facts regarding the long term capital gain in the return of income and claimed it as exempt u/s 10(38) of the Act. The AO initiated penalty proceedings without clearly framing the charges, leading to uncertainty regarding the basis of the penalty. The Tribunal emphasized that the AO's approach of initiating penalty without clear charges is impermissible under the Act. It was established that the assessee had not concealed any particulars and had fully disclosed the capital gain. The Tribunal referenced a similar case where the assessee's disclosure was accepted, highlighting the need for clear evidence of false claims to levy a penalty. The Tribunal further cited the decision of the Hon'ble Apex Court in CIT vs. Reliance Petroproducts Pvt. Ltd., stating that if the assessee fully discloses particulars in the return of income, they are not liable for penalties based on revenue's acceptance. Therefore, the Tribunal set aside the order of the appellate authority and directed the AO to delete the penalty. The decision was in line with the principle that full disclosure by the assessee exempts them from penalties, even if revenue disagrees with the disclosures. In conclusion, the appeal of the assessee was allowed, and the penalty order was directed to be deleted. The Tribunal's decision was based on the principle of full disclosure by the assessee and the impermissibility of imposing penalties without clear charges or evidence of false claims.
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