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TMI Blog2024 (6) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... ct is applicable to the assessee. According to provisions of section 115G non-resident assessee is not required to file her return of income u/s 139 (1) if total income in respect of which she is assessable under this act during the previous year consisted only of investment income or income by way of a long-term capital gain or both and tax deductible at source under the provisions of chapter XVII B has been deducted from such income. There is no dispute that assessee is a non-resident, she is deriving only investment income and tax is deductible at source on such income. Only dispute is that tax deductible at source is at the rate of 12.5% whereas the deductor has deducted tax at the rate of 10%, therefore, the return of income was not filed - On detection, on receipt of notice under section 148 of the act, assessee offered that income and also paid the balance tax of 2.5% on that income which is arising due to shortage of tax deducted at source. Therefore the assessment is made at the returned income. But AO considered that there is a concealment of income. We find that there is an error made by the deductor and not the deductee i.e. assessee. For this, the assessee could not ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i (the learned AO) under section 271(1)(c) of The Income Tax Act 1961[ The Act] of Rs. 150,606/- levied by the penalty order dated 27/9/2022 was confirmed. 02. Assessee aggrieved with the same has preferred this appeal raising following grounds:- 1. On the facts and circumstances of the case, CIT(A) erred in confirming the Penalty levied u/s. 271(1)(c) of the Act of Rs. 1,50,606. 2. On the facts and circumstances of the case, the penalty levied u/s. 271(1)(c) on basis of the assessment order which itself was bad in law since the AO had no power to issue Notice u/s. 148 during the financial year 2020-21 and order passed in pursuant to the said notice is bad in law and hence penalty order is also bad in law. 3. a) On the facts and circumstances of the case and in law, the assessment order passed u/s. 147 is bad in law since order dated 27/03/2022 is digitally signed only on 30/03/2022 DIN was taken on unsigned order, which is not permitted hence order is bad in law. b) The penalty order passed u/s. 271(1)(c) on basis of such assessment order is void ab-initio. 4. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the penalty without considering deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For impugned assessment year only source of income was interest on investment. As per The Double Taxation Avoidance Agreement the rate of tax on interest income is 12.5% the tax deduction at source was required to be done from the interest income at the rate of 12.5% but the deductor deducted tax at source on interest income at the rate of 10% instead of 12.5% resulting into an additional tax of ₹ 1,751,121. She was under the bonafide belief that as the complete tax was detected properly , no additional tax was payable by her and therefore no return of income was required to be filed by her. She further stated that on receipt of the notice under section 148 of the act and ongoing that shortfall has arisen on tax liability, immediately paid tax thereon along with interest and filed the return of income which is accepted as it is after the complete scrutiny. Therefore there is neither a concealment of income and nor furnishing of inaccurate particulars of income and therefore the penalty should not be levied under section 271(1)(C) of the act. 05. The learned assessing officer was of the view that as assessee has not filed the return of income under section 139 of the act despi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest income instead of 12.5%. He submits that assessee has received interest from that party of ₹ 6,083,333/ tax thereon is deducted at the rate of 10%. The tax demand is also arising only because of 2.5% less tax deducted by the tax deductor. He further submits that in the assessment order the learned assessing officer has not stated whether the assessee has concealed the income or furnished inaccurate particulars of income. However in the show cause notice dated 27/3/2022 the learned assessing officer has mentioned that assessee has concealed the particulars of income. In penalty order in paragraph number 5.2 the AO has invoked both limbs. Whereas in paragraph number eight of the order the AO was satisfied that assessee has furnished inaccurate particulars of income. He submits that the learned CIT A has confirmed the addition on the decision of the honourable Supreme Court in case of MaK data. 08. He submits that all the details are available with the assessing officer as all the details are exhibited in form number 26 AES there is no error in the income stated in that form. He submitted that inadvertently as the deduct has not deducted proper tax the notice was is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing inaccurate particulars on attempting to conceal its income. Therefore he submitted that the penalty in the case of the assessee should not have been levied and confirmed by the authorities. 09. The learned departmental representative vehemently supported the order of the learned lower authorities and submitted that it was found on the basis of a non-filers detail available with the lower authority that assessee has on income and has not filed her return of income. On the examination of the return of income it was found that assessee has income on which lesser tax has been deducted. Had the revenue not invoke the provisions of reopening of the assessment, this income would have gone taxed at a lower rate and therefore the penalty has rightly been levied for furnishing inaccurate particulars of income. 010. We have carefully considered the rival contention and perused the orders of the lower authorities. In this case there is no dispute that assessee has earned income from one party on which tax is deductible at source under section 195 of the act. The payer of the interest has deducted tax at the source at the rate of 10% instead of 12.5%. The assessee as soon as the notice und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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