2011 (6) TMI 462

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....ar for the Respondent. Dr. O. K. Narayanan, Vice-President - This appeal is filed by the assessee. The appeal is directed against the order of the Commissioner of Income-tax (Appeals)-I at Chennai dated December 31, 2010 and arises out of the order of the Assessing Officer imposing a penalty of Rs. 2,34,653 passed under section 158BFA(2) of the Income-tax Act, 1961. 2. The assessee is a H....

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....ntary return offering the capital gains for taxation. The assessee computed the tax liability at 20 per cent, which is normally applicable to long-term capital gains. The return filed by the assessee was anyhow belated. The Assessing Officer did not take into cognizance the belated return and completed the assessment accordingly. The assessee disclosed nil undisclosed income in the belated return ....

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....by the assessee at 20 per cent along with its return could not have been accepted. All these factors are very relevant for completing the quantum assessment and demanding the tax at 60 per cent from the assessee. 5. But the above factors are not sufficient to impose penalty under section 158BFA. The reason that the assessee has not furnished any undisclosed income in the block return filed by i....

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....omplete. The only correction was calculating tax at 60 per cent instead of 20 per cent. 6. If the assessee had not furnished its belated return immediately after the search, the assessee would have definitely offered the capital gains for taxation in its block return. If that amount is offered through the block return there would be no case of action to impose penalty. Therefore it is to be see....