2024 (4) TMI 1113 - AT - Income Tax

Tribunal Deletes Penalty of Rs. 10,38,976 for 2017-18, Emphasizing Disclosure of Interest Income in Tax Assessment.

The Tribunal allowed the assessee's appeal, ordering the deletion of the penalty of Rs. 10,38,976 under sec. 270A of the Income Tax Act, 1961, for the ... Penalty u/s. 270A - Under-reporting of income / Mis-reporting - taxpayer herein has been found not to have disclosed it’s interest income/ interest on income tax refunds during the course of quantum assessment - HELD THAT:- We find from the assessee’s corresponding audited books [including P & L A/c] read with details of indirect incomes as well as the ledger(s) that it had duly included the foregoing interest in the indirect income head duly forming part of the computation submitted in quantum proceedings. Revenue at this stage vehemently argued that the lower authorities may be directed to verify this alleged clinching fact. No reason to accept the Revenue’s remand prayer once it is found that all these assessee’s details duly form part of the case file all along right from the course of assessment to the impugned penalty proceedings. Also in Reliance Petro Products [2010 (3) TMI 80 - SUPREME COURT] that quantum and penalty are parallel proceedings wherein any addition made in the course of former does not ipso facto attract latter provision. We accordingly find it a fit case to delete the impugned penalty in very terms. Assessee’s appeal is allowed. Issues:The judgment involves proceedings u/s. 270A of the Income Tax Act, 1961 for assessment year 2017-18, concerning the imposition of penalty for under-reporting income due to misreporting.Assessee's Challenge:The assessee challenged the correctness of the penalty imposed under sec. 270A(8) and (9) amounting to Rs. 10,38,976, contending that the interest income of Rs. 14,61,904 on income tax refunds was duly disclosed in the computation submitted during quantum assessment. The Revenue argued that the interest income was not disclosed.Judgment:After considering the pleadings and arguments, the Tribunal found no merit in sustaining the penalty. The Tribunal noted that the interest income was included in the indirect income head of Rs. 15,16,593.67 as per the audited books and ledger submitted by the assessee. The Tribunal rejected the Revenue's request for verification, stating that all relevant details were part of the case file from assessment to penalty proceedings. Citing the Supreme Court's decision in CIT vs. Reliance Petro Products, the Tribunal emphasized that additions in quantum proceedings do not automatically attract penalty provisions. Consequently, the Tribunal ordered the deletion of the penalty of Rs. 10,38,976.Conclusion:The Tribunal allowed the assessee's appeal, pronouncing the order in open court on 25.04.2024.