Appeal allowed as income not concealed; Penalty of Rs. 15,65,000 set aside

The Appellate Tribunal ITAT Nagpur allowed the appeal of the assessee in a case involving a penalty imposed under section 271(1)(c) for concealing income. The Tribunal held that since the income was declared in the return and accepted by the Assessing Officer, it could not be deemed concealed. The penalty of Rs. 15,65,000 was set aside, with directions for cancellation by the Assessing Officer.

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Issues involved:
The appeal against the penalty imposed u/s 271(1)(c) confirmed by the CIT(A) is being considered by the Appellate Tribunal ITAT Nagpur.

Summary:

Issue 1: Penalty u/s 271(1)(c) - Concealment of income

The assessee, engaged in courier services, had cash seized from an employee, later declared as income. The Assessing Officer imposed a penalty of Rs. 15,65,000 u/s 271(1)(c) for concealing this income. The CIT(A) upheld the penalty, citing Explanation 5 to section 271(1)(c). The assessee contended that since the cash was surrendered and declared as income, it should not be considered concealed income. The Tribunal observed that Explanation 5 applies to assets found during a search u/s 132, not requisition u/s 132A as in this case. As the income was declared in the return and accepted by the Assessing Officer, it could not be deemed concealed. The penalty was set aside, directing cancellation by the Assessing Officer.

Decision:
The appeal of the assessee is allowed.

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