Issue of notice - concealment of Income

[Krishan K Dalmia]

Rectification of Mistake U/s 154 of IT Act. In a case assessee file IT return by taking sales consideration as per the Sales deed. ITO passes the order and accepted the same. After ITO issued 154 notice that the sales consideration should be the amount on which the purchaser had paid the STAMP DUTY. ITO issued the challan of Rs. 8.73 Lacs. Assessee paid the challan. My question is that will ITO issue notice u/s 271(1)(C) for the concelament of income. Regards

[Surender Gupta]

Penalty u/s 271(1)(c) can not be imposed unless it is proved by the AO that there was wrong intention of the assessee and he has evaded tax deliberately. Mere an order u/s 154 can not satisfy this condition. Therefore, you need to argue this case accordingly.

[Harish Chander Bhatia]

In your case section 50 has been invoked,and the same was required to be contested, since you have accepted the the decision of the AO and admitted the tax,it is an active concealment and to avoid imposition of penalty, it should be argued strongly quoting various case laws available in your favour

AI Summary

Penalty for concealment requires proof of deliberate tax evasion; rectification alone does not establish intent. Imposition of penalty under section 271(1)(c) requires proof of deliberate evasion; a rectification under the assessment procedure alone does not establish wrongful intent, though acceptance of an assessing officer's adjustment and payment may be argued as active concealment and should be contested with evidentiary and case-law support.