2014 (12) TMI 849 - HC - Income Tax

Tribunal affirms deletion of penalty for voluntary gift income surrender under Income Tax Act.

The Tribunal affirmed the deletion of penalty under Section 271(1)(c) of the Income Tax Act, 1961 for an assessee who voluntarily surrendered a gift ... Surrender made can be considered as voluntary or not - Held that:- The Tribunal has confirmed the finding of fact which has been arrived at by the CIT (A) - The only submission which was urged was that in view of the lapse of two years between the date of original assessment and the date of revised computation, the surrender cannot be regarded as voluntary – there was no substance in the submission - the submission requires the Court to re-appreciate the factual material which is impermissible – as such no substantial question of law arises for consideration – Decided against revenue. Issues:1. Imposition of penalty under Section 271(1)(c) of the Income Tax Act, 1961.2. Deletion of penalty by the Commissioner of Income Tax (Appeals) and affirmation by the Tribunal.3. Interpretation of the phrase 'concealed particulars of income or furnished inaccurate particulars' in Section 271(1)(c).4. Justification of the voluntary surrender of the gift amount by the assessee.5. Failure to prove the identity, creditworthiness of the donor, and genuineness of the transaction by the assessee.Analysis:1. The Assessing Officer imposed a penalty on the assessee for not disclosing the actual nature of a sum received as a gift, which was later surrendered as income after two years. The penalty was based on the delay in surrendering the amount after the original return was filed.2. The penalty was deleted by the Commissioner of Income Tax (Appeals) and affirmed by the Tribunal, stating that the revised computation and voluntary deposit of tax and interest by the assessee indicated an agreed addition rather than deliberate concealment.3. The Revenue raised questions on the interpretation of the phrase 'concealed particulars of income or furnished inaccurate particulars' in Section 271(1)(c), highlighting the fulfillment of these conditions in the case.4. The Tribunal upheld the voluntary surrender of the gift amount by the assessee, disregarding the initiation of inquiries by the Directorate of Income Tax (Investigation), Kanpur, and emphasizing the lack of evidence for penalty initiation.5. The Tribunal dismissed the appeal, noting that the factual findings by the CIT (A) were confirmed, and there was no substantial question of law raised. The failure of the assessee to prove the identity, creditworthiness of the donor, and genuineness of the transaction was also highlighted as a factor in the decision.