TaxTMI 
TaxTMI 
2024 (8) TMI 354
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....2024 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are identical except the difference in the amount of penalty disputed. The ld. DR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. 543/JP/2024 is taken as a lead case. 4. Before moving towards the facts of the case we would like to mention that the assessee has assailed the appeal in ITA No. 543/JP/2024 on the following grounds; "1. The impugned penalty order u/s 271(1)(c) dated 12.12.2018 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed. 2. Rs. 1,08,258/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the penalty imposed by the AO u/s 271(1)(c) of Rs. 1,08,258/-. The penalty so imposed and confirmed by the CIT(A) being totally contrary to the provisions of law and facts kindly be deleted in full. 3. The impugned show cause notice issued u/s 274 r.w.s 271(1)(c) of the A....
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....naccurate particulars of income to the extent of wrong claim of deductions amounting to Rs 1,59,000/- under Chapter-VIA of the income-tax Act, wrong claim of loss of Rs 70,000/- under the head house property income and for concealing particulars of income to the extent of Rs 1,21,350/- on account of non declaration of income from other sources were initiated. Noticed u/s 274 read with section 271(1)(c) of the Income-tax Act dated 23.08.2018 was issued and served upon the assessee in which the assessee was required to explain as to why penalty u/s 271(1)(c) of the Act may not be imposed in the case for furnishing inaccurate particulars of income on account of excessive claim of deduction amounting to Rs. 1,59,000/- under chapter VIA of the Income-tax Act, for wrong claim of loss of Rs. 70,000/- under the head house property income and for concealing particulars of income to the extent of Rs. 1,21,350/- on account of non declaration of income from other sources. The assessee submitted the reply to this show cause notice. The replies furnished by the assessee was considered but was not accepted because the assessee claimed deduction under Chapter VIA of the Act year after year, which ....
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....ing the assessment proceedings or during the penalty proceedings. It is therefore the ld. AO held that the assessee failed to declared his accurate income and further in the course of proceedings failed to offer any satisfactory explanation regarding furnishing of inaccurate particulars of income to the tune of Rs. 1,59,000/- under Chapter VIA of the Act and loss from House property at Rs 70,000 as well as concealing of particulars of interest income of Rs 1,21,350/-. In the instant case the assessee has also made a deliberate attempt by making a claim of excessive deduction as discussed above and held not allowable at all as prescribed under the Law. Accordingly, the assessee is held to be in default u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income of Rs 1,59,000/-and Rs 70,000/- and for concealing of particulars of income of Rs 1,21,350/-. The assessee has knowingly, intentionally and fraudulently claimed this wrong deduction year after year and thus the conduct of the assessee is abnormal. Considering this fact the penalty is levied at 200% as against the minimum penalty of 100%. Accordingly, a penalty of Rs. 2,16,520/- was imposed upon the assessee under....
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....fe invoke incorrect deductions to claim the refunds. His wife was ignorant that these deductions were not applicable to him and this process continued since appellant was not able to scrutinize the returns before filing. On receipt of Notice from the Department, appellant came to know that wrong deductions have been claimed in returns. The incorrect returns were revised by the appellant on his own account after hiring the services of a Chartered Accountant without waiting for any directive to pay the outstanding tax from the IT dept. Taxes as applicable have been deducted at source and paid up front. The Assessee is an honest taxpayer and there was no deliberate intention on part of the assessee to conceal any amount of tax. It was not a deliberate error and was rectified by the appellant on his own will and initiative. 6.4 1 do not concur with the appellant's contention the ENT because of sheer ignorance wrong deductions were claimed. The appellant has claimed deductions for continuous five years and a bonafide mistake cannot occur in every year. This is clearly an attempt to evade payment of tax by reducing the taxable income through claiming wrong deduction under Chapter V....
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.... deductions were claimed and cannot avoid paying penalty for claiming false deduction on grounds that its claim was supported by advice from a some person. 6.7 The appellant has also contended that he revised his return and withdrawn the wrong claimed deduction suo-moto. I do not agree with the appellant's contention because for five years in a row he claimed these deductions Had the Revenue not initiated any action under section 133(6) of the Act to make inquiries about claim of deduction under Chapter VIA of the Act, the original return, which was invalid, would have attained finality and after lapse of maximum time limit to initiate any action under the Income Tax Act, 1961, no action could have been taken leaving the Department at total loss of revenue claimed by the assessee by way of erroneous and illegitimate deductions under Chapter VIA of the Act. Thus only after initiation of enquiries by the Department u/s 133(6) of the Act on 12.03.2018 and after issue of notice u/s 148 of the Act on 26.03.2018 appellant has revised his return 09.06.2018. 6.8. Thus in view of above, The action of the assessee in respect of claim of such illegitimate deduction, loss under the hea....
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....s pertinent to mention here that in the return filed in response to notice u/s 148 of the Act for A.Y. 2012-13 filed by the assessee, taxable income has been declared at Rs. 14,09,150/- after declaring income from other sources at Rs 1,80,097/-, without claiming loss of Rs 70,000/- from house property and after claiming deduction under u/s 80C at Rs. 1,00,000/-. Assessment proceedings for the assessment year 2012-13 had been completed under section 143(3)/148 on 23.08.2018 at an income of Rs. 14,09,150/-. While framing assessment, penalty proceedings under section 271(1)(c) of the Act for furnishing inaccurate particulars of income to the extent of wrong claim of deductions amounting to Rs 1,59,000/- under Chapter-VIA of the income-tax Act, wrong claim of loss of Rs 70,000/- under the head house property income and for concealing particulars of income to the extent of Rs. 1,21,350/- on account of non-declaration of income from other sources were initiated. Noticed u/s 274 read with section 271(1)(c) of the Income-tax Act dated 23.08.2018 was issued (PB 9) and served upon the assessee in which the assessee was required to explain as to why penalty u/s 271(1)(c) of the Act may not be....
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....ome of Rs 1,21,350/-. The assessee has knowingly, intentionally and fraudulently claimed this wrong deduction year after year and thus the conduct of the assessee is abnormal. Considering this fact, the penalty is levied at 200% as against the minimum penalty of 100%. Accordingly, a penalty of Rs. 2,16,520/- is hereby imposed upon the assessee under section 271(I)(c) of the Act, which is imposable i.e. 200% of the tax sought to be evaded, as computed below:" In the first appeal, the ld. CIT(A) also upheld the penalty so imposed however, it was reduced from 200% to 100%, holding as under: "6.4 I do not concur with the appellant's contention that because of sheer ignorance wrong deductions were claimed. The appellant has claimed deductions for continuous five years and a bonafide mistake cannot occur in every year. This is clearly an attempt to evade payment of tax by reducing the taxable income through claiming wrong deduction under Chapter VIA of the Act. The assessing officer has correctly pointed out that in the case of a salaried employee, the employee is required to submit a declaration to the Drawing and Disbursing officer every year before the close of year in which all t....
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....ce u/s 148 of the Act on 26.03.2018 appellant has revised his return 09.06.2018. 6.8 Thus in view of above, the action of the assessee in respect of claim of such illegitimate deduction, loss under the head income from house property and nondisclosure of interest income show wilful attempt of the assessee to furnish inaccurate particulars of income as well as to conceal particulars of income and to evade tax. Thus penalty levied by the assessing officer is upheld. 6.9 Through grounds of appeal, the appellant has raised his contention against the levy of penalty at 200%. I have perused the order and it is observed that the Assessing officer has levied the penalty at 200% without citing any reasons. Thus I find it reasonable that minimum penalty at 100% is to be levied. Thus Assessing officer is directed to recalculate the penalty at 100%. 7. The appeal of the appellant is partly allowed." Feeling aggrieved, hence this appeal. Submissions: 1. Assessment and penalty - separate proceedings: It is pertinent to note that the AO has levied the penalty for concealment of income only & only on the basis of findings recorded by the AO in the assessment order. It is settled that a....
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....A, is rather misleading. Interestingly, the AO very cunningly skipped to mention the fact as to whether such declaration was actually filed and if yes, whether such declaration contained the claim of wrong deductions (under consideration). Since this was a matter between the DDO and the assessee hence, no mistakes were committed and the DDO made tax deductions at source (TDS) on correct income and hence, no action is reported against the DDO under the relevant TDS provisions. Pertinently thus, tax was already deducted/paid initially. 2.2 A notice u/s 133(6) dated 12.03.2018 (PB 2) was issued to the assessee whereby, certain information in support of the deduction claimed u/s 80U was required from the assessee (but, there is no mention of deductions claimed u/s 80CCF, 80D, 80DD and 80G etc.). However, the given notice u/s 133(6) in no manner shows (or alleges) that some wrong claim was made by the assessee with a view to conceal and/or to furnish inaccurate particulars. The notice simply required the assessee to provide certain information related to/ in support of the deductions claimed. It is not the case of the AO that some information (TEP) came to his possession that the appe....
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....ositions, can it be believed that a person of such stretcher would have been involved in such petty and minor wrong claim made in the ROI. As a matter of common knowledge normally a military man who is serving the nation at the border, is considered to be an honest and law abiding citizen. The AO miserably failed to rebut this general presumption by bringing strong cogent evidence against the assessee. 6. Supporting case laws on detection: 6.1 CIT vs. Pushpendra Surana (2013) 96 DTR 0231 (Raj) (DC 8-9) 6.2 In the case of CIT v/s Agrawal Round Rolling Mills Limited (2013) 85 CCH 0510 (Chatt) (DC 1-2), it was held that: "Penalty-Penalty u/s 271(1)(c)-Concealment of income-Addition of share application money-Assessee, a company manufacturing iron and steel re-rolled products filed its return showing loss-Subsequently, notice u/s 143(2) was issued and query was asked regarding share application money received by Assessee- Assessee filed its reply mentioning therein that it had received share application money through cheques and drafts which was cleared by banks-However, in case of 12 applicants for which detailed list was separately enclosed, necessary documents were not there....
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....t person assessable to tax qua the said income- Therefore, penalty under s. 271(1)(c) is not leviable." 6.4 PCIT vs. Trisha Krishnan [2019] 111 taxmann.com 97 (SC) (DC 10-11) "Section 4, read with section 271(1)(c), of the Income-tax Act, 1961 - Income - Chargeable as (Advances) - Assessment year 2010-11 - Assessee was a Cine artist - For relevant year, assessee filed her return declaring certain taxable income - Subsequently, assessee filed a revised return admitting additional income - Difference between income originally declared and total income admitted in revised return represented advance received by assessee in said assessment year from various cinema producers towards work to be done by her - In course of assessment, Assessing Officer opined that assessee filed revised returns only after revenue issued notice under section 143 and, therefore, it should be construed that assessee was guilty of deliberate concealment of income - Assessing Officer further noted that assessee had made payments of audit fee, professional charges and commission etc. on which tax was deducted at source but no proof of remittance of same into Government account was produced - He, thus, disallowe....
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.... area like Ladakh, his inability to scrutinize the returns due to the circumstances beyond his control, his wife a layman preparing the computation without the aid of a regular tax consultant followed by immediate acceptance and withdrawal of the mistaken claim at the first occasion itself i.e. in response to notice u/s 133(6) which was even prior to the serving of the notice u/s 148, resultantly it could not be a case of prior detection nor could be a case of intended wrong claim with a view to suppress the income or to evade taxes. 7.3. It must be appreciated that there has been no such allegations in the entire period of 30 years prior to or after this block period of AY 2012-13 to 2016-17. 7.4. Interestingly the AO has himself admitted that the assessee did not claim any deduction from the DDO. However, instead of giving credit to this crucial fact he rather misused and misinterpreted these facts to his favor. 7.5 There is no substance in the allegation that the assessee has been claiming such wrong declarations year after year without appreciating the totality of facts & circumstances and the crucial fact that most of the time he remained at Ladakh, almost disconnected w....
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....refore, offered to pay the differential amount of the capital gain which was offered vide letter dated 13.06.2014. Pursuant to the said letter, the department issued notice u/s 148 on 03.07.2014 in response to which the assessee offered correct income and also paid the tax, additional tax interest etc. The assessment was completed later on without making any addition as compared to ROI filed u/s 148. 7.6.2 Price Waterhouse Coopers Pvt. Ltd. vs CIT (2012) 348 ITR 306 (SC) held that: "19. The contents of the Tax Audit Report suggest that there is no question of the assessee concealing its income. There is also no question of the assessee furnishing any inaccurate particulars. It appears to us that all that has happened in the present case is that through a bona fide and inadvertent error, the assessee while submitting its return, failed to add the provision for gratuity to its total income. This can only be described as a human error which we are all prone to make. The caliber and expertise of the assessee has little or nothing to do with the inadvertent error. That the assessee should have been careful cannot be doubted, but the absence of due care, in a case such as the present....
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....ding. In the penalty proceedings, thus, the AO is required to bring positive material showing intentional concealment. However, in this case the AO failed to bring any positive evidence on record to show that the assessee really intended to conceal the subjected items of income. The AO accepted what the assessee declared in the revised ROI and without any variation the AO even assessed the same. Therefore, the onus lay upon the AO has not been discharged. 8.2 The word "concealment" inherently carried with it the element of mens rea. To impose a penalty u/s 271(1)(c), it must be proved that the assessee has consciously made the concealment or furnished inaccurate particulars of his income. The said principle has been reiterated in Virtual Soft Systems Ltd. vs. CIT (2007) 207 CTR (SC) 733: (2007) 289 ITR 83 (SC) held that: "24. Sec.271 of the Act is a penal provision and there are well established principles for the interpretation of such a penal provision. Such a provision has to be construed strictly and narrowly and not widely or with the object of advancing the object and intention of the legislature." 8.3 The present case is also supported by decision of this Hon'ble bench....
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....gap of 5 months i.e. on 31.03.2011. Undisputedly, the assessee is aged 61 years mainly deriving salary income and stationed at Mumbai whereas his chartered accountant was situated at Jaipur. It was a period when there was less or no automation and the department also could not bring on record that every income suffering TDS was being shown through form 26AS in time nor it is shown that Form 16A if issued by all those parties providing income to the assessee, were timely given to the assessee. The contention of the revenue that additional income suffered TDS and, therefore, the assessee should have declared for the income in the original return itself, is far from the ground realities which prevailed at the relevant point of time. It was a quite usual practice for the deductor to issue certificate in form 16A or to upload the same in form 26AS lately. It cannot be denied that the assessee must have been under a bona fide impression that all such incomes were subjected to TDS and therefore, he is not concealing any income from the department. The decisions cited in the penalty order do not help the revenue being rendered in different factual context. In the past also, the income from....
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....e has to be construed strictly and no penalty cannot be imposed unless the case strictly fall within the legal parameters. We, therefore, direct the AO to delete the penalty imposed u/s 271(1)(c) under challenge." 9.1. The CBDT, long back through a binding Circular no.14(XL-35), dated 11.04.1995 (DC 50-51) has directed the subordinate authorities not to take advantage of assessee's ignorance rather they are supposed to guide taxpayers. Unfortunately, however in this case despite the assessee specifically asking the AO at the very beginning, unfortunately there was no response given on the contrary, the AO took full advantage of the situation as stated earlier. 9.2 Time and again the Hon'ble Apex Court came down heavily on the Income Tax Department stating that the Department is not there just to punish the tax payers for their bonafide mistakes. An assessee cannot be denied his claim on a mere technicality when the assessee is legally otherwise entitled to the deduction, which has been demonstrated in various judgements listed below: (a) ITO v. S. Venkataiah [2013] 1 ITR (Trib)-OL 256 (Hyd) in I.T.A. No. 984/Hyd/2011, (b) CIT v. Smt. Minalben S. Parikh [1995] 215 ITR 81 (Guj), ....
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....d the submissions of the rival parties and perused the material available on record. We find that the assessee filed return on 1-10-2004 showing a loss of Rs. 1,01,79,983, which comprises of business loss of Rs. 16,16,157 and depreciation loss of Rs. 85,63,826. While making the assessment, it was observed by the Assessing Officer that the loss claimed in the return of income relates to depreciation and miscellaneous expenditure. In the absence of any business done, as admitted by the assessee, the expenditure claimed cannot be allowed and depreciation is also not admissible and hence not allowed to be carried forward and accordingly completed the assessment at 'nil' income ignoring the loss returned by the assessee. We further find that the Assessing Officer without initiating any penalty proceedings during the course of assessment proceedings-initiated penalty proceedings u/s 271(1) (c) of the Act. At this stage, the ld. Departmental Representative submits that treating the return as non-est tantamounts to recording of satisfaction and initiation of penalty proceedings u/s 271(1) (c). However, we find that the literal meaning of non-est is 'it is not', absent, want....
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.... TDS and was duly accepted by the AO as well. Admittedly, there is no upward variation made by the AO in the declared income. 11.2 The subsequent validly filed ROI substitutes the earlier one: It is well settled that if ROI has been filed u/s 139 within the permissible time limit, it can be revised u/s 139(5) and once so revised, the revised ROI substitutes the original one. It is only the revised ROI, which is a valid legal document for all intent and practical purposes and the AO having accepted such revised ROI, cannot look back/fall back on the initially filed ROI u/s 139(1). Similar is the legal position with reference to the ROI filed u/s 148, which substitutes the ROI, filed if any, prior thereto in as much as the ROI filed u/s 148 not only consisted of the originally returned income but also the additional income, if any. Thus, here also, the ROI filed u/s 148 is the last legal document, wherein the assessee has committed himself to a particular amount of income and the facts narrated therein. In the peculiar facts of the present case where the initially filed ROI u/s 139(4) was held invalid and thus, was a non-existing document, it was only a ROI filed u/s 148, which a....
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....to the assessee, which incidentally gives him an opportunity to make good omission, if any, in the original return. Once the A.O. accepts the revised return filed u/s 153A, the original return u/s 139 abates and becomes non-est. Now, it is trite to say that the "concealment" has to be seen with reference to the return that it is filed by the assessee. Thus, for the purpose of levying penalty u/s 271(1)(c), what has to be seen is whether there is any concealment in the return filed by the assessee u/s 153A, and not vis-a vis the original return u/s 139" 11.3.4 Prem Arora vs. DCIT (2012) 78 DTR 91 (Delhi) (Trib) wherein, it was held as under: "Section 271(1)(c), read with section 153A, of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 2004-05 - Whether for purpose of imposition of penalty u/s 271(1)(c) resulting as a result of search assessments made u/s 153A, original return of income filed u/s 139 cannot be considered - Held, yes - Whether concealment of income has to be seen with reference to additional income brought to tax over and above income returned by assessee in response to notice issued u/s 153A and, therefore, once returned income u/....
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....erein the ld. Chief Judicial Magistrate has recorded the following facts : a. That notice u/s 133(6) dated 07.07.2017 (CPB- Pg. 17) seeking information w.r.t deduction u/s 80E was sought (however, no mention of deduction u/s 80C, 80D,80DD, 80DDB, 80GG) was issued to Smt. Himani Sharma. The said information was sought by the said AO on his personal email id i.e [email protected] instead of using his official id. b. That the said ITO - Shri M.P. Singh used to call Smt. Himani Sharma at least 10 times per day, apart from letters, showing lapses and discrepancies on the part of the said ITO. c. Thereafter, notice u/s 133(6) on dated 31.01.2018 was issued calling for information w.r.t. deductions claimed u/s 80C, 80D, 80DD, 80DDB, 80GG of the Act. [Note 1: When the 1st notice u/s 133(6) was issued, the said ITO had no idea that Smt. Himani Sharma had claimed erroneous deductions under various provision of Chapter VI A. However, after issuance of the said notice u/s 133(6) dated July 2017, the ITO contacts her over call, wherein she explained the entire situation. The ITO, taking advantage of the said fault, and with depictive intent showing her that he is actually helpin....
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....on against M.P. Singh, ITO Bathinda a hurried steps were taken for launching prosecution against her." h. Refer Para 29 : The ld. CJM has categorically observed that "It has become amply clear that entire procedure adopted by assessing officer/ITO Bathinda was not as per the rules provided under Income Tax Act rather it is found that the procedure was hijacked to prejudice the accused Himani Sharma in a double zeopardy manner by crossing/jumping over all the mandatory bars as provided under the above discussed sections of Income Tax Act, 1961." 1.2 Further, the instant assessee also went on to file a complaint on dated 24.03.2023 before the Additional Director General - Vigilance (North Zone), Delhi against the said ITO - Bathinda and other officials of Income Tax Office, Bathinda w.r.t their extortion activities and malicious vendetta (Refer CPB - Pg 19). The same is reproduced hereinbelow for ready reference : "1. Please refer DGIT (Vig)/FCR-B/Gr.B/11/19/449 dated 15 April 2019 vide which an initial complaint was filed against Mr. Mohinder Pal Singh, ITO Ward-1(2), Bathinda. 2. My wife Himani Goyal Sharma was subjected to a malicious Extortion Attempt and Vendetta by ITO....
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....case of Smt. Himani Sharma - - 2. 12.03.2018 Notice u/s 133(6) (PB 2) This notice was issued for A.Y. 2016-17 only wherein information was sought regarding deduction claimed u/s 80U only. Notice u/s 133(6) only w.r.t A.Y.2016-17 (& not other years) 3. 18.03.2018 Reply to Notice u/s 133(6) (PB 3) In reply, the assessee informed the AO that deductions (except u/s 80CCE & 80G), have been claimed erroneously. He also requested for guidance w.r.t the amount to be refunded, with a voluntary affirmation to promptly refund the said amount. Thus, the assessee himself voluntarily disclosed that erroneous claim of deductions have been made in the ROI, in as much as a general enquiry was carried out w.r.t deduction u/s 80U only. At the very moment, there was no requirement upon the assessee to point out the erroneous claim of deductions made w.r.t the other sections. This clearly shows the assessee honesty and intent to voluntary disclosure. 4. Judgment of Hon'ble Supreme Court in the case of Mak Data P. Ltd. Vs. CIT not applicable / Distinguishable : 4.1 Facts Distinguished : (i) Firstly, In Mak Data case, the AO had issued a Show Cause Notice seeking specific inform....
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....PCIT vs Ambady Krishna Menon[2024] 163 taxmann.com 141 (Kerala), wherein the relevant fact are that the assessee filed a return on 30.07.2011 for A.Y. 2011-12, which was processed under Section 143(1) on 28.12.2012. Later, the Dept. suspected suppression of capital gains and issued a summons under Section 131 on 19.05.2014, to which the assessee responded by 13.06.2014, admitting his mistake in the computation of capital gains and thereupon agreed to the differential tax. Upon admission of the assessee, notice u/s 148 was issued on 03.07.2014 for reassessment, and the assessee filed a fresh return, paying the differential tax and interest. The Hon'ble Division Bench, considering the above facts, held as under : "8. On a consideration of the facts and circumstances of the case and the submissions made across the bar, we find that it is not in dispute that in the original return filed by the respondent/assessee, only a lesser figure was returned both in respect of the total income as also capital gains earned by the respondent/assessee. It is also not in dispute that but for the investigation initiated by the Revenue, the differential income might have escaped assessment to tax. Wh....
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....ne will govern the imposition of penalties. In terms of Section 271(1)(c) of the I.T. Act, the penal provision is attracted only when the conditions therein are fulfilled namely, when there is a concealment of the particulars of an assessee's income or when the assessee has furnished inaccurate particulars of such income. The crucial question that arises for consideration before us is whether on the facts of the instant case those pre-conditions existed for initiating proceedings under Section 271 of the I.T. Act. Further, the provisions of Section 271(1) of the I.T. Act mandate that the existence of the conditions precedent for imposition of penalty under Section 271(1)(c) of the I.T. Act must have been noticed by the Assessing Authority in the course of some proceedings under the I.T. Act. In other words, the satisfaction of the Assessing Authority with regard to the existence of either of the conditions warranting the invocation of the provisions of Section 271(1)(c) had to be in the course of proceedings initiated by the Assessing Authority under the I.T. Act. In our view, the reference to proceedings under Section 271 of the I.T. Act, on the facts of the instant case, can ....
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....tial tax to cover the period of delay in payment thereof. The payment of statutory interest having compensated the exchequer adequately, to further penalise the assessee would tantamount to an act of overkill and would be antithetical to the rule of law. We are of the firm view that the honesty of an assessee cannot attract the penal provisions under the I.T. Act and that, in the instant case, the essential pre-conditions for the invocation of the provisions of Section 271(1) (c) of the I.T. Act against the assessee were not established." 5.2 Hindustan Coca-Cola Marketing Company (P.) Ltd. v. DCIT [2014] 49 taxmann.com 61 (Delhi - Trib.) : Facts : During the quantum assessment proceedings, the Assessing Officer observed that an amount of Rs. 11,55,634/- on account of conveyance was not included in the value of fringe benefit. Accordingly, the Assessing Officer disallowed 20% of these expenses which was added to the total value of fringe benefit. On being informed by the Assessing Officer, the assessee agreed that this was a mistake in calculating the value of FBT. During the penalty proceedings, the Assessing Officer also took cognizance of the fact that the assessee had not fi....
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.... must be proved to be existing. The intention of this nature may not be equated to the concept of mens rea. At the same time, the minimum contrast with an instance of mere omission, or failure must be made. Otherwise, every inadvertent omission, or a bona fide understanding of a particular provision, which is not accepted by the Income Tax Officer may expose the assessee to penalty. If that time is pursued, Act may turn out to be the one of the collection of penalties than the income tax. Recently, in I.T.T.A.No.180 of 2003, we observed as under: The levy of penalty cannot be resorted to as a matter of course. By their very nature, the returns are bound to be at variance from what is contemplated under the Act or the estimates of the Assessing Officers. Many a time, the understanding of a given provision in a particular way, itself would lead to a considerable difference as to the income or the corresponding tax. The very fact that quite large number of remedies in the form of appeals at various stages is provided for, discloses that even the understanding of the assessing or adjudicatory authorities; not absolute. The levy of penalty is not going to leave the matter at that. It ....
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....ent to prove that there was concealment of particulars of income or furnishing inaccurate particulars of income. In the instant case, such onus which shifted on the department has not been discharged. In the circumstances, we do not find that there is any ground for this Court to substitute our interfere with the finding of the Tribunal on the aspect of the bonafides of the conduct of the assessee." 9. The ld. AR of the assessee in addition to the written submission vehemently argued that there is no difference in the return of income filed in response to notice u/s. 148 of the Act and thereafter the assessed income. It is not legally possible that for making assessment the ROI filed u/s 148 is not considered and is to be considered for imposition of penalty, whereas the ROI filed earlier u/s 139 cannot. To support this view he relied upon the various decision cited in the written submission. 10. The ld DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the order of the ld. CIT(A). The ld. DR further argued that ld. AO has mentioned the reasons that the assessee has not disclosed the correct income i....
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....018 levying a penalty of Rs. 2,16,520/- for concealing and furnishing inaccurate particulars of income @ 200 %. In the first appeal the ld. CIT(A) has confirmed the action of the ld. AO in levying the penalty but the reduced it from 200 % to 100 %. The assessee has challenged that order of the ld. CIT(A) confirming the penalty @ 100 % of tax sought to be evaded. The assessee contended that the return of income in response to the notice u/s. 148 filed by the assessee and finally assessed income in the case of the assessee has same income of Rs. 14,09,150/-. Thus, since there is no difference in the returned income and assessed income there cannot be any levy of further penalty as the assessee has already paid the tax along with the interest. As it is clear from the order of the assessment that there is no difference in the assessed income and returned income. Since, there is no concealment of income or providing any inaccurate particulars of income in the case of assessee finally assessed there cannot be levy of penalty u/s. 271(1)(c) of the Act. We get strength to support our view from the decision of Jurisdictional Hon'ble Rajasthan High Court in the case of CIT Vs. Pushpendra Sur....
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....said disclosure hold valid without any adjustment and made good faith voluntarily. We support this view from the decision of the Hon'ble High Court of Gujarat in the case of Cheldas Khushalas Patel and Ors. Commissioner of Income Tax on 31 January, 1992, 1992 196 ITR 200 Guj wherein the Hon'ble High Court held as under:- "7. The Commissioner, in the case of the firm, refused to waive penalty and interest for the assessment years 1976-77 and 1977-78 only on the ground that the returns filed beyond the prescribed period could not be considered to be returns in the eye of law. As pointed out above, since the returns for the said two assessment years were filed beyond the period prescribed for making assessment, the Income-tax Officer issued notice under section 148 of the Act and at the request of the petitioners treated the returns which were earlier filed as returns filed in response to the notice under section 148. It is urged on behalf of the Revenue that disclosure of income voluntarily and in good faith, as envisaged under sub-clauses (a) and (c) of sub-section (1), could be made only by filing a valid return and, if disclosure was not made by a valid return, such disclosure c....