Appeal Allowed: Penalty under Income Tax Act Section 271(1)(c) Deleted for AY 2015-16

The ITAT Member allowed the appeal, setting aside the penalty imposed under section 271(1)(c) of the Income Tax Act for the Assessment Year 2015-16. The Member found that the omission of income was due to a bona fide mistake promptly rectified by the assessee, with no evidence of willful concealment. Relying on judicial precedents emphasizing the burden of proof on the revenue and the need for explanations, the Member ruled in favor of the assessee, directing deletion of the penalty.

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Issues:
Levy of penalty under section 271(1)(c) of the Income Tax Act, 1961.

Detailed Analysis:

Issue: Levy of Penalty under Section 271(1)(c) of the Act
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) confirming the penalty under section 271(1)(c) of the Act for the Assessment Year 2015-16. The assessee, engaged in advocacy, declared income but omitted a professional receipt of Rs. 5 lakh due to an accountant's oversight. The AO initiated penalty proceedings, contending that the assessee concealed income. The assessee argued it was a bona fide mistake rectified promptly. The AO, however, imposed a penalty of Rs. 1,54,500.

Analysis:
The AO found the undisclosed income was offered only after departmental detection, implying potential tax evasion. The AO emphasized the duty to disclose true income and the absence of mens rea, citing the explanation to section 271(1)(c) which deems any addition to total income as concealment unless proven otherwise. The AO referred to CBDT circulars and judicial pronouncements to justify the penalty. The CIT(A) upheld the penalty, leading to the appeal.

Judicial Precedents:
The ITAT Member referred to the Madhya Pradesh High Court's ruling emphasizing the revenue's burden to prove concealment or inaccurate particulars, with the burden shifting to the assessee based on explanations provided. The Supreme Court's confirmation of this principle was also cited.

Conclusion:
The ITAT Member considered the factual background, noting the accountant's human error in omitting the receipt. The assessee rectified the mistake promptly upon realization, with no evidence of willful concealment. Citing a Gujarat High Court case, the Member ruled in favor of the assessee, deeming the explanation bona fide and setting aside the penalty. The appeal was allowed, directing deletion of the penalty imposed.

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