2013 (7) TMI 412

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....ear under consideration on 30-10-2006 declaring total income of Rs. 4,33,480/-. During the course of assessment proceedings, it was noticed by the A.O. that the amount of Rs. 18,18,995/- received by the assessee from his employer M/s Annunay Fab Limited on account of consultancy/commission etc. was shown under the head "profits and gains of business or profession" after deducting various expenses claimed to be incurred for earning the said income. According to the A.O., the said income was chargeable to tax in the hands of the assessee as salary income keeping in view the employer-employee relationship between M/s Annunay Fab Limited and the assessee and when this position was confronted by the A.O. to the assessee, the later accepted the s....

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....ome. According to the revised computation of income, I have to pay a sum of Rs. 6,66,303/- 1 have already made the full payment of taxes before 31-3-2009. The relevant tax payment challans are enclosed for ready reference. Thus the whole tax liability has been discharged. In view of the above, I request you to drop the penalty charges since I never had malafide intention to circumvent income tax liability in any manner whatsoever. I hope you will consider my request." The explanation offered by the assessee as above was not found satisfactory by the A.O. and rejecting the same, he imposed penalty of Rs 6,12,272/- u/s 271(1)(c) of the Act being 100% of the tax sought to be evaded by the assessee by offering income from commission/co....

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....des and also perused the relevant material available on record. It is observed that one of the reasons given by the ld. CIT(A) for canceling the penalty imposed by the A.O. u/s 271(1)(c) of the Act is that the corresponding addition made to the total income of the assessee was merely as a result of change of head of income. In this regard, the ld. D.R. has contended before us that by offering the income from commission/consultancy etc. received from his employer as business income instead of salary income, the assessee clearly found to be guilty of furnishing inaccurate particulars of his income and penalty was rightly imposed by the A.O. u/s 271(1)(c) of the Act. In the case of Reliance Petroproducts Pvt. Ltd. reported in (2010) 322 ITR 15....