Appellate Tribunal rules penalty not applicable when additional income accepted during assessment.

The Appellate Tribunal upheld the cancellation of the penalty u/s.271(1)(c) of the Act for the assessment year 2005-06. The Tribunal found that when the Assessing Officer accepted the additional income offered by the assessee during assessment proceedings, the penalty was not leviable. The decision was based on legal principles established by the Kerala High Court and other judicial authorities, leading to the dismissal of the revenue's appeal.

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Issues involved: Appeal against cancellation of penalty u/s.271(1)(c) of the Act for assessment year 2005-06.

Summary:
The appeal was filed by the revenue against the cancellation of penalty amounting to Rs. 2,01,960/- u/s.271(1)(c) of the Act for the assessment year 2005-06. The assessee, a doctor practicing as a gynecologist, had undergone a survey u/s.133A, resulting in an additional income of Rs. 6,00,000/- offered by the assessee on an agreed basis during the assessment proceedings. The Assessing Officer (AO) levied the penalty, which was later canceled by the Commissioner of Income-Tax (Appeals) citing various judicial precedents. The Appellate Tribunal upheld the decision of the CIT(A) based on the judgment of the Kerala High Court and other legal authorities, stating that when the AO accepted the additional income offered by the assessee during assessment proceedings, the penalty u/s.271(1)(c) is not leviable. The Tribunal found no infirmity in the CIT(A)'s order and dismissed the appeal of the revenue.

In conclusion, the Appellate Tribunal upheld the cancellation of the penalty u/s.271(1)(c) of the Act for the assessment year 2005-06, based on the legal principles established by the Kerala High Court and other judicial authorities.

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