Appeal allowed due to identical assessed and returned incomes, no basis for penalty under section 271(1)(c)

The Tribunal allowed the assessee's appeal, ruling that since the assessed and returned incomes were identical and both incomes were subject to TDS, there was no basis to uphold the penalty under section 271(1)(c) of the Income-tax Act, 1961. The Tribunal directed the Assessing Officer to delete the penalty of Rs. 76,674 imposed for the assessment year 2010-11.

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Issues:
Levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961.

Analysis:
The appeal was filed by the assessee against the order of the Commissioner of Income Tax [Appeals] confirming the penalty under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 2010-11. The penalty proceedings were initiated based on the assessment order framed under section 143(3) r.w.s. 147 of the Act. The Assessing Officer observed a difference between the total TDS amount and the total tax paid by the assessee, leading to the levy of a penalty amounting to Rs. 76,674. The assessee contended that the returned income and assessed income were the same, indicating no concealment of income to evade tax.

During the proceedings, the ld. AR argued that since the assessed income and returned income were identical and both incomes were subjected to TDS, there was no concealment of income. On the other hand, the ld. DR supported the Assessing Officer's findings. The Tribunal considered the facts and noted that both the salary and rental income were subjected to TDS. Even though the return of income was filed only after receiving a notice under section 148, the assessed income remained the same as the returned income. The Tribunal found no grounds to conclude that the assessee had concealed income, especially when both incomes were under TDS scrutiny. Consequently, the Tribunal directed the Assessing Officer to delete the penalty of Rs. 76,674.

In conclusion, the Tribunal allowed the appeal filed by the assessee, highlighting that when the assessed and returned incomes are the same and both incomes were subjected to TDS, there is no basis to uphold the penalty under section 271(1)(c) of the Income-tax Act, 1961.

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