ITAT allows appeals, removes penalties for income concealment and audit report delay.

The ITAT allowed both appeals filed by the appellant, deleting the penalties imposed under sections 271(1)(c) for concealment of income and 271B for delay in filing audit report.

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Issues:
1. Validity of penalty under section 271(1)(c) for concealment of income.
2. Validity of penalty under section 271B for delay in filing audit report.

Issue 1: Validity of penalty under section 271(1)(c) for concealment of income:
The appellant filed appeals against orders passed by Ld. CIT (A) for the assessment year 2014-15. The appellant challenged the penalty imposed under section 271(1)(c) for concealment of income and failure to furnish the audit report within the stipulated time. The Ld. CIT (A) upheld the penalty under section 271(1)(c) after finding that the appellant had not disclosed certain bank accounts containing substantial amounts. The appellant contended that the omission was inadvertent and not deliberate. However, the Ld. CIT (A) considered this explanation as self-serving and confirmed the penalty. The appellant then appealed to the ITAT.

Upon review, the ITAT observed that the appellant had not disclosed certain bank accounts during the assessment, resulting in the addition of income based on estimation. However, the appellant later produced the bank accounts and reconciled the credits, demonstrating good faith during the assessment proceedings. The ITAT noted that no specific addition was made in the assessment order regarding these accounts, and the appellant's conduct did not indicate willful neglect or fraud. Therefore, the ITAT concluded that the penalty for concealment under section 271(1)(c) was unwarranted, and the penalty was deleted.

Issue 2: Validity of penalty under section 271B for delay in filing audit report:
The penalty was imposed on the appellant for delay in uploading the audit report within the due date. The appellant argued that the delay was due to ill health and lack of means to comply with procedures in the village where they resided. The Ld. CIT (A) upheld the penalty, but the appellant appealed to the ITAT. The ITAT considered that the delay was three months and noted that the appellant had not been penalized for similar defaults in previous years. The reason cited for the delay was the appellant's ill health during the relevant period, which was not disputed by the revenue.

The ITAT found no malafide intent on the part of the appellant and considered that the penalty should be viewed leniently, given the circumstances. As the appellant had provided a valid reason for the delay, and there was no evidence to the contrary, the ITAT decided to delete the penalty under section 271B. Consequently, the grounds raised by the appellant in this appeal were allowed, and the appeal was upheld.

In conclusion, the ITAT allowed both appeals filed by the appellant, deleting the penalties imposed under sections 271(1)(c) and 271B.

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