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TMI Blog2023 (1) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be denied that additional income was shown by the assessee himself and it is not the case of the revenue that they unearthed the additional income by carrying out investigations. In addition, we find force in the contention by the Ld. AR that there were justified reasons behind delayed declaration of additional income from these sources. The contention of the revenue that additional income suffered TDS and, therefore, the assessee should have declared for the income in the original return itself, is far from the ground realities which prevailed at the relevant point of time. It was a quite usual practice for the deductor to issue certificate in form 16A or to upload the same in form 26AS lately. It cannot be denied that the assessee must have been under a bona fide impression that all such incomes were subjected to TDS and therefore, he is not concealing any income from the department. The decisions cited in the penalty order do not help the revenue being rendered in different factual context. In the past also, the income from all the three sources have never been to this extent. The consultancy income was for the first time. Also it is evident that there as chances of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnishing of inaccurate particulars of income. The impugned penalty based on such a notice being contrary to the provisions of law and facts kindly be quashed. 2.1 During the course of hearing, the ld. AR of the assessee has not pressed the Ground No.3. Hence, the same is dismissed being not pressed. 3.0 Brief facts of the case are that the assessee filed the return of income for the assessment year under consideration on 30-03-2010 at a total income of Rs.80,56,970/-. Subsequently, the assessee revised return on 31-03-2011 declaring income of Rs.1,03,90,360/-. Hence, the case of the assesee was completed u/s 143(3) of the Act on 31-10-2011 at a total income of Rs.1,03,90,360/-. However, the ld. CIT(A) vide order dated 21-04-2015 dismissed the appeal filed by the assessee. 3.1 During penalty proceedings u/s 271(1) of the Act, the AO noted that the assessee declared income from salary from Essar Investment Ltd. and claimed interest u/s 24(b) of Rs.1,50,000/- on self occupied property. The AO noted that in revised return the assessee declared income from house property, interest from FDRs and consultancy fees also. According to the AO, since the original return was not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concealed income for reason that this income was declared in the revised return filed on 31.03.2011 whereas notice under section 143(2) was already issued on 18.10.2010. Ld. Authorized Representative argued that declaration of income was voluntarily made. Notice under section 143(2) only required the assessee to submit evidence in support of return. No specific query with reference to non-declaration of the various income was ever raised. 2.3.1 On perusal of overall facts, it is seen that the appellant has filed revised return only after issue of notice under section 143(2). If this notice was not issued, the appellant would not have revised his return. In fact, he revised return on 31.03.2011 though notice under section 143(2) was issued on 18.10.2010 i.e. only after 5 months. Therefore, it cannot be said that revised return was filed voluntarily by assessee. 2.3.2 Further, Assessing Officer in assessment order initiated penalty by specifically mentioning that assessee has concealed income and finally imposed penalty on concealment of income. This shows the clear finding on Assessing Officer's part regarding concealment of income by the assessee. Looking to these fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case. The assessing officer in the assessment order as also in the penalty order, if any, nowhere recorded any finding and nor refered any specific query raised by him nor it was a case of survey / search or a case of getting information from a third party) and it was the assessee itself who, on its own declared the income. The ld. CIT(A) did not judicially appreciate such contention. 2.2 Legally speaking, the revised computation / return of income might not be admissible for technical reasons yet it was a good material admittedly available on the record of the AO showing the fact that the assessee had included and always intended to include such income in its taxable total income and it is only such material, which has been made a basis and is the starting point by the AO. The AO has proceeded only w.r.t. such material. He has not only accepted the figures mentioned in the revised computation / return of income but also assessed the same. It is not disputed that the entire amount of the tax becoming payable on such a revision was duly deposited by way of the Self-assessment tax and TDS and was duly accepted by the AO as well. Admittedly, there is no upward variation made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dani (2009) 311 ITR 0327 (Guj) (DPB 3-6), it was held that: Penalty under s. 271(1)(c)-Concealment-Revised return filed before detection of concealment-Tribunal has found that though certain queries were raised and put to the assessee, no particular item of concealed income was specifically pinpointed-As a matter of fact the process of detection was not complete till the date when the assessee filed revised returns surrendering the amounts reflected in various bank accounts in the names of his family members as his own income from undisclosed sources-There is no material on record to indicate that the aforesaid finding of the Tribunal is incorrect in any manner whatsoever-Further, Tribunal has also found that very same amounts have already been assessed along with interest in the hands of the family members and those family members have never admitted that they were benamidars of the assessee-Hence, even the Department is not certain, as to who is the right person assessable to tax qua the said income-Therefore, penalty under s. 271(1)(c) is not leviable. 3.3 CIT vs Suresh Chandra Mittal (2001) 251 ITR 9 (SC), CIT vs. SAS pharmaceuticals (2011) 335 ITR 0259 (Del) and CIT vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that in absence of the relevant details how the assessee can be charged with the blame of the concealment. The assessee accordingly, after waiting for the uploading of the Form-26AS could file the original return only on 30.03.2010 (PB 1-3) i.e. before the due date u/s 139(4). It is only at a later point of time, when the assessee could obtain TDS certificates, he revised his ROI immediately. The revised ROI was filed on 31.03.2011 (PB 4) when additional income of Rs. 23.33 Lakh was declared, consisting of the interest on FDR of Rs.10,43,740/- (interest of Rs.2,71,133/- from ING Vysya Bank Ltd.(PB-22), Interest of Rs.56,491/67 from the Lakshmi Vilas Bank Ltd and Rs.7,18,122/- is maturity amount wrongly offered) apart from rental and other income which was noticed from Form-26AS reflecting the entries uploaded by the Deductors / Payers in their TDS returns. Fortunately, again in the revised TDS returns the Lakshmi Vilas Bank the figure of Rs.7,72,571/73 was replaced by of Rs.56,491/67 as per Form-26AS (PB-45). 5.1 Strikingly Interest of FDR income of Rs.7,18,122/- was not at all taxable / includible in total income: It will be surprising to note that the interest on FDR, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o filed an application for rectification u/s 154 of the I T Act before the AO on 21.11.2011 to get the mistake rectified by reducing the income wrongly declared to the extent of 7,18,122/- (Rs.7,72,570/- less Rs.54,448/-) but still remains pending till date to the best of our knowledge. 5.5 Once, there was no income at all of Rs.7,18,122/- there cannot be any question of imposition of penalty u/s 271(1)(c) w.r. thereto We may clarify that revision of income was not at all necessitated because of the issuance of the notice u/s 143(2) on dated 18.08.2010 (refer AO order u/s 143(3) Pg-1) because there was no specific query raised by the AO upto that point of time so as to make the assessee wiser but it was an move taken by the ld. C.A. himself. 6. TDS suffered income is not concealed income: 6.1 Pertinently, the entire amount was subject to TDS and even the payers / deductors of such incomes to the assessee have duly made Tax Deduction at Source being Rs.2,17,620/- on Rent, Rs.19,261/- on consultancy fee, Rs.33,932/- on FDR Interest respectively. Once such income appears in the TDS statement in Form-26AS and tax has been deducted how it can be a case of undisclosed income. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come and after adjusting same, balance amount of tax along with interest was also deposited, it could be held that assessee had not concealed particulars of his income - Held, yes - Whether therefore, penalty imposed on assessee was to be deleted - Held, yes 6.2.3 PCIT vs. Trisha Krishnan [2019] 111 taxmann.com 97 (SC) (DPB 11) Section 4, read with section 271(1)(c), of the Income-tax Act, 1961 - Income - Chargeable as (Advances) - Assessment year 2010-11 - Assessee was a Cine artist - For relevant year, assessee filed her return declaring certain taxable income - Subsequently, assessee filed a revised return admitting additional income - Difference between income originally declared and total income admitted in revised return represented advance received by assessee in said assessment year from various cinema producers towards work to be done by her - In course of assessment, Assessing Officer opined that assessee filed revised returns only after revenue issued notice under section 143 and, therefore, it should be construed that assessee was guilty of deliberate concealment of income - Assessing Officer further noted that assessee had made payments of audit fee, professi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the declared figure of interest on FDR in A.Y. 2006-07 stood at Rs.38,325/- (PB 35), in A.Y. 2007-08 it was Rs.`Nil` (PB 32) and in A.Y. 2008-09 it was of Rs.2,21,497/- (PB 27), as against Rs.3,27,624/75 in the year under consideration i.e. A.Y. 2009-10. Thus, the income from interest on FDR never reached the whopping figure of Rs.10,43,740/- (PB 6). Similarly, there was no consultancy in earlier years and the rental income was only upto Rs.2 Lakh. 8. Initially no TDS claimed by the assessee: The bonafide of the contention of the assessee and the fact that the assessee never intended to conceal any income at all, is fully established from a bare perusal of computation at the time of filling original ROI (PB 2-3) wherein, the assessee did not at all made any claim of TDS or the computation did not contain any details of TDS, (deducted by Bank, SJVN Ltd and Isolux Ingenieria) for the simple reason that the assessee did not claim any such income which is being declared now. In other words, had the assessee knew such income he would have certainly declared the same and claimed TDS credit. It is not the case of the AO of the ld. CIT(A) that though the assesse claimed TD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P) Ltd. (2010) 322 ITR 158 (SC) is quite useful in as much as in that case it was held that w.r.t. return Penalty under s. 271(1)(c)-Concealment-Disallowance of claim for deduction- In order to attract the provisions of s. 271(1)(c), there has to be concealment of income or furnishing of inaccurate particulars of his income by the assessee-In the instant case, assessee claimed deduction of interest on loans taken by it for purchase of shares-AO disallowed such interest-Admittedly, no information given in the return was found to be incorrect or inaccurate-Hence, the assessee cannot be held guilty of furnishing inaccurate particulars-Making an incorrect claim in law cannot tantamount to furnishing of inaccurate particulars-Merely because the assessee claimed deduction which has not been accepted by the Revenue, penalty under s. 271(1)(c) is not attracted-If the contention of the Revenue is accepted, the assessee would be liable for penalty under s. 271(1)(c) in every case where the claim made by the assessee is not accepted by the AO for any reason-That is clearly not the intendment of the legislature. Applying this ratio on the present case, it will be found that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the original return could have been filed beyond the due date of Section 139(1) waiting for the correct and complete information of income to be included, necessitating an upward revision of income. Further had the assessee woke up only after issuance of notice u/s 143(2), he could have filed the revised return immediately but not after a long gap of 5 months i.e. on 31.03.2011. Undisputedly, the assessee is aged 61 years mainly deriving salary income and stationed at Mumbai whereas his chartered accountant was situated at Jaipur. It was a period when there was less or no automation and the department also could not bring on record that every income suffering TDS was being shown through form 26AS in time nor it is shown that Form 16A if issued by all those parties providing income to the assessee, were timely given to the assessee. The contention of the revenue that additional income suffered TDS and, therefore, the assessee should have declared for the income in the original return itself, is far from the ground realities which prevailed at the relevant point of time. It was a quite usual practice for the deductor to issue certificate in form 16A or to upload the same in form ..... X X X X Extracts X X X X X X X X Extracts X X X X
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