Penalty levied u/s 271(1)(c) for concealment of income was ...

Penalty for Income Concealment Overturned Due to Lack of Evidence on Deliberate Understatement by Taxpayer.

November 25, 2024

Case Laws     Income Tax     AT

Penalty levied u/s 271(1)(c) for concealment of income was challenged. The Assessing Officer (AO) alleged that the assessee understated turnover and concealed income based on the difference between the original return and the revised return filed pursuant to a notice u/s 148 after a survey. However, the AO failed to record the original returned income and the revised returned income in the assessment order or penalty order, making it impossible to determine the concealed amount. The AO merely made a bald statement about understated turnover without substantiating the deliberate underestimation of income. Mere projected financials found during the survey and recorded statements cannot justify the penalty unless the assessee deliberately suppressed income. The Appellate Tribunal held that since the AO failed to demonstrate deliberate underestimation of income by the assessee, the inference of concealment was unjustified. Consequently, the penalty was deleted in favor of the assessee.

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