2019 (3) TMI 575 - AT - Income Tax

Tribunal cancels penalty under sec. 271(1)(c) for AY 2010-2011, finding no concealment

Smt. Babita Khurana Versus The DCIT, Central Circle, Noida.

Smt. Babita Khurana Versus The DCIT, Central Circle, Noida. - TMI Issues:Challenging the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2010-2011.Analysis:The appeal was against the order of Learned CIT(A)-IV, Kanpur, for the assessment year 2010-2011, contesting the penalty under section 271(1)(c) of the Income Tax Act, 1961. The original return declared a total income of Rs. 5,44,730, but after a search operation under section 132, the assessee declared a total income of Rs. 14,19,729. The assessing officer initiated penalty proceedings under section 271(1)(c) for concealment of income or filing inaccurate particulars. The penalty was confirmed by the Learned CIT(A).The Assessee's Counsel argued that the penalty notices were illegal and did not specify the grounds under section 271(1)(c). They contended that no incriminating material was found during the search, and the addition was due to the deeming provision under Section 50C, not concealment of income. The Departmental Representative argued that declaring income under section 153A does not absolve from penalty.The Tribunal held that the penalty was not justified. The assessing officer accepted the return under section 153A without mentioning any incriminating material. The addition was made under Section 50C, and the return was accepted, indicating no concealment. The Tribunal cited a Delhi High Court case supporting this view. The assessing officer's actions regarding the penalty notices were deemed unjustified, following a Karnataka High Court decision. Consequently, the Tribunal set aside the penalty orders.In conclusion, the Tribunal allowed the assessee's appeal, canceling the penalty under section 271(1)(c) for the assessment year 2010-2011.