2020 (2) TMI 1306

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....rred in confirming the penalty of Rs. 3,03,756/-- imposed by the Assessing Officer under the provisions of Section 271 (1)(c) of the Income Tax Act, 1961. Your Appellant submits [hat they have received interest of Rs. 491,513/- on the Income Tax refund LI'S 244A and the accountant of the Firm credited the same in the books of account to Income [ax Account and since the amount of interest was not appearing separately it was clubbed in the Income Tax Refund figure and therefore by mistake was credited to the Income Tax account and thus left out to be credited to Profit and Loss Account and thus left to be clubbed in taxable income. Further the actual Income tax refund together with Interest was received in the subsequent Assessment Ye....

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....l income of Rs. 43,06,401/- by making additions towards income from other sources being interest received on income tax refund u/s 244A amounting to Rs. 4,91,513/-. Thereafter, penalty proceedings u/s 271(1)(c) of the I.T.Act, 1961 was initiated for furnishing inaccurate particulars of income. During the course of penalty proceedings, the assesee vide letter dated 14/08/2015 has filed detailed submissions and argued that it is has neither concealed particulars of income, nor furnished inaccurate particulars of income, which warrants levy of concealment penalty u/s 271(1)(c) of the I.T.Act, 1961. The Ld. AO did not convince with arguments of the assessee and by taking note of various facts, including by following certain judicial precedents,....

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.... has erred in confirming penalty levied by the Ld. AO u/s 271(1)(c) of the I.T.Act, 1961,without appreciating the fact that the assessee has offered interest received of income tax refund u/s 244A of the Act, in the subsequent AY 2013-14, when the actual refund was credited to the account of the assessee. The Ld. AR, further submitted that the Ld. AO, as well as the Ld.CIT(A) were erred in coming to the conclusion that the assesse has made deliberate attempt to evade tax on interest income, ignoring the fact that interest on income tax refund was very much available with the department in Form No. 26AS and there is no possibility of non disclosure of said interest income for taxation. The assessee has not offered interest income for the yea....

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....t having specific details with regard to interest received on income tax refund, although the refund vouchers was generated by the department. Further, refund generated for AY 2009-10 was adjusted to tax payable for AY 2007-08 and was finally refund was issued on 30/03/2012. This information was available to the assesee on 23/05/2012. Therefore, the assesse claimed that it has not considered interest income for the impugned assessment year, however fact remains that said interest income has been offered to tax for the AY 2013-14 and this fact has not been disputed by the lower authorities. But, the Ld. AO has levied penalty only on the ground that although, the assesee is following mercantile system of accounting, it has not offered interes....