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of <h1>Tribunal Overturns Tax Penalty for Inaccurate Income Particulars</h1> <h3>Shri Radheshyam Sarda & Others Versus ACIT, Indore</h3> Shri Radheshyam Sarda & Others Versus ACIT, Indore - TMI Issues:Appeals against imposition of penalty u/s 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2005-06.Analysis:1. Initiation of Penalty Proceedings:The appeals were filed against the penalty imposed by the Assessing Officer under section 271(1)(c) of the Act. The penalty was initiated based on the belief that the assessee furnished inaccurate particulars of income only after receiving a notice u/s 148. However, the counsel for the assessee argued that the penalty should be deleted as the revised return was filed much before the notice u/s 148 was issued, rendering the reasons for initiating the penalty proceedings incorrect. The counsel relied on various High Court decisions to support this argument.2. Evidentiary Value of Statements:The penalty was also contested on the grounds that it was based on statements recorded during a survey, which the counsel argued had no evidentiary value. Citing judgments from the Kerala and Madras High Courts, it was contended that statements recorded under section 133A do not hold evidentiary value and cannot be the sole basis for imposing a penalty.3. Change of Head of Income:The assessee had originally declared income from long-term capital gains but later offered it as income from other sources in a revised return to avoid litigation due to non-cooperation from a broker. The counsel argued that this change in the head of income does not constitute concealment, citing precedents where penalties were not levied for similar changes.4. Legal Precedents and Authorities:Various High Court decisions and legal precedents were cited to support the arguments against the imposition of the penalty. These cases highlighted the importance of consistency between the reasons for initiating a penalty and the grounds on which it is levied.5. Judicial Interpretations and Precedents:The Tribunal referred to past judgments, including a case from the Punjab & Haryana High Court, to support the conclusion that no penalty should be levied when a revised return is filed before the finalization of assessment. The Tribunal emphasized that the burden lies on the revenue to prove concealment or inaccurate particulars of income, which was not established in this case.6. Final Decision:After considering all arguments, case laws, and the factual matrix, the Tribunal found that the penalty under section 271(1)(c) was not justified in this case. Citing various legal precedents and the specific circumstances of the case, the Tribunal allowed the appeals of the assessee, concluding that it was not a fit case for levying the penalty.This detailed analysis of the judgment highlights the key legal arguments, precedents, and interpretations that led to the decision to allow the appeals against the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961.
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