AI Drafter 
TaxTMI 
TaxTMI 
2024 (8) TMI 354
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....s submitted that the matter in ITA No. 543/JPR/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. ....
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....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 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 ....
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....ation for furnishing inaccurate as well concealing particulars of income either during 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....
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.... appellant has claimed that his wife was misguided by some unscrupulous elements who prepared the returns and made his wife 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. Th....
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.... the expert's opinion may not be used as a shelter to avoid penalty, as the explanation of the assessee is not bonafide. The appellant can't claim that by mistake such 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 26.03.201....
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....o the assessee on 26.03.2018, which was duly served upon the assessee on the same day. In response to the notice's u/s 148, the assessee filed return of income on 09.06.2018 for the assessment year 2012-13. It is 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 re....
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....s 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/- 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....
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....ng 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 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." F....
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....egitimate deductions u/s 80C of Rs. 1,00,000/- (based on EPF deductions) as evident from form 16 (PB 10-11) therefore, the inference and allegations of the AO that the appellant did not declare complete statement of facts and did not submit any documentary evidence to his DDO towards claiming of deductions under Chapter VI 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 all....
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....essee filed the ROI in all other years. The AO intently avoided this fact. 5B. Human probabilities, the surrounding circumstances also plays an important role in the income tax proceedings as held in the case of Sumati Dayal v. CIT [1995] 80 Taxman 89 (SC). In this case, as stated, the assessee who is a military man since last 30 years and holding senior positions, 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 retu....
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....es-There is no material on record to indicate that the aforesaid finding of the Tribunal is incorrect in any manner whatsoever-Further, Tribunal has also found that very same amounts have already been assessed along with interest in the hands of the family members and those family members have never admitted that they were benamidars of the assessee-Hence, even the Department is not certain, as to who is the right 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 ....
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.... in paper forms and there was no provision of e-verification at that time so the assessee was not at a position to verify the contents of the computation. All the defective returns were bearing mobile no. and email address of his wife only. ROI filed u/s 148 were prepared & filed by the CA only. 7.2 The totality of facts & circumstances being the adverse operating condition of the assessee during his posting at the border and hilly 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 himse....
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....ally sustained due to lack of essential pre-conditions and procedural defects in penalty notice - Held,yes [Para 9][In favour of assessee]" In that case also, after filing ROI the revenue suspected suppression of capital gain and therefore, initiated inquiry by issuing summons u/s 131 and the assessee while preparing the details for onward submissions, realised that he committed an inadvertent mistake (while preparing the reply) and on the review of the return initially filed therefore, 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 app....
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....y to the provisions of law: 8.1 The order imposing penalty is quasi-criminal in nature and, thus, heavy burden lies on the department to establish that the assessee had concealed his income. Since the burden of proof in penalty proceeding varies from that in the assessment proceeding, a finding in an assessment proceeding that a particular receipt is income or that a deduction has wrongly been claimed, cannot automatically be adopted, though a finding in the assessment proceedings constitutes good evidence in the penalty proceeding. 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....
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....y carrying out investigations. In addition, we find force in the contention by the Ld. AR that there were justified reasons behind delayed declaration of additional income from these sources. Hence, it was not improbable if the original return could have been filed beyond the due date of Section 139(1) waiting for the correct and complete information of income to be included, necessitating an upward revision of income. Further had the assessee woke up only after issuance of notice u/s 143(2), he could have filed the revised return immediately but not after a long 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 i....
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....ntention of the ld. AR that once the additional income has suffered TDS it cannot be said to be undisclosed income of the assessee. We have gone through the decisions cited by the ld. AR and find that 16 ITA NO. 968/JP/2019 SURESH MAL LODHA VS ACIT, CIRCLE-6, JAIPUR they support the case of the assessee. A cumulative consideration of all the facts and circumstances clearly establish that it was not a case of concealment of income with respect to the declaration of the additional income It is well settled principle of interpretation of penal provisions that the same 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 ful....
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....the only ROI acted upon by the AO for making the assessment. Having held the ROI filed earlier as non-est, he could not fall back on an invalid ROI. It is not legally possible that for making assessment the ROI filed u/s 148 is considered whereas the imposition of penalty, the ROI filed earlier u/s 139(4) even though an invalid return, is considered, which is an inherent contradiction in the approach of the AO. 10.2 Supporting Case Laws: 10.2.1 In the case of Navbharat Enterprises Pvt. Ltd vs ACIT (2009) 118 ITD 8 (Hyd) (DC 29-35), it was held as under: "12. We have carefully considered 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 ....
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.... concealment/furnishing inaccurate particular, the very starting point is the last return of income filed by the assessee which has been acted upon by the assessing officer and it is the income so returned and the income finally assessed by the AO, which invites imposition of penalty. In a case where however, there is no such difference, there cannot be any question of imposition of penalty. The AO has not only accepted the figures mentioned in the (revised) return of income u/s 148 but also assessed the same. It is not disputed that the entire amount of the tax becoming payable on such a revision was duly deposited by way of the Self-assessment tax and 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, ....
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....epted the revised return filed by the assessee u/s 153A, no occasion arises to refer to the previous return filed u/s 139 of the Act. For all purposes, including for the purpose of levying penalty u/s 271(1)(c) of the Act, the return that has to be looked at is the one filed u/s 153A. In fact, the second proviso to Section 153A(1) provides that "assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search u/s 132 or making of requisition u/s 132A, as the case may be, shall abate." What is clear from this is that Section 153A is in the nature of a second chance given 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 t....
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....er Chapter VI A of the Act had been claimed in her case also. Pertinently, the DCIT - Mr. Arvind Bansal are also the same. Moreover, in her case also, notice u/s 133(6) was issued w.r.t deduction claimed u/s 80E of the Act. Thereafter, notice u/s 148 was issued, wherein the assessee filed her revised return and duly paid all the taxes. Even then penalty u/s 271(1)(c) was initiated. Importantly, thereafter, in her case the dept. went on to lodge prosecution complaint u/s 276C(1)/276C(2)/ 276CC and 277 of the Act. The said prosecution order consists of some very pertinent and crucial facts. Kindly refer ld. Chief Judicial Magistrate's order dated 21.08.2023 in the case of DCIT 1-, Bhatinda vs. Himani Sharma (CPB dated 03.07.2024 - Pg. 20- 43), wherein 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. Th....
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....essee. f. Refer Para 26 : Notice u/s 148 was issued for A.Y. 2014-15 by the said ITO. The Ld. Court has specifically noted that the said notice u/s 148 was barred by limitation as per S. 149 and further, there was no satisfaction of the competent authority u/s 151. g. Refer Para 11 : The said judgment notes that "Accused has taken the plea that as in consequent of filing of returns due to her lack of knowledge and ignorance. She was subjected to ab-latent extortion attempt by her assessing officer ITO Bathinda and when she did not comply to extortion demand and aired her grievances on the IT Web portal, a malicious vandata was launched against her by ITO Mr. M.P. Singh and DCIT Mr. Arvind Bansal depicting the nexus existing at Bathinda IT office and instead of initiating disciplinary action 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 prejudic....
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.... 3.1 Consider the above facts, and keeping in mind that (1) the Assessing Officer - ITO Bathinda and his superior DCIT - Mr. Arvind Bansal were the same (2) The wife of assessee had already disclosed the said ITO in response to notice u/s 133(6) dated July 2017 w.r.t the erroneous deduction u/c VI A of the Act (3) the ITO was regularly contacting the wife of the assessee - in the starting of the proceedings with depictive intent showing her that he is actually helping her. 3.2 The ITO Bathinda - Mr. M.P. Singh already knew the fact that the present assessee had also wrongly claim of deduction (just like in his wife's case). Thus, with a malicious vendetta and depictive intent to extort money later, he ill-advised the assessee. 3.3 Now, kindly refer the date chart below : S.No. Date Events Facts Remark 1. 31.01.2018 Notice u/s 133(6) in the 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 Repl....
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....n which is found to be false then it shall be deemed that particulars have been concealed. 4.1.2 However, in the present case, the issue of failure on the part of the assessee does not even arise in as much as (kindly refer the table above) the assessee has with all truthfulness and simplicity, straightforwardly and voluntarily admitted that some deductions had been wrongly claimed, even before the notice could be issued. In this regard, notice u/s 133(6) (PB-3) was issued seeking information regarding deduction claimed u/s 80U only (however, no mention of deduction u/s 80C, 80D,80DD, 80DDB, 80GG). Still the assessee voluntarily choose to disclose the fact of erroneous claim of deduction u/s 80C, 80D,80DD, 80DDB, 80GG. Hence, the assessee cannot be said to have failed to offer explanation when no notice in that regard had been issued. 5. Supporting Case Laws - Distinguishing the judgment of Mak Data P. Ltd. vs CIT : 5.1 Covered Issue : Recent judgment of 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 ....
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....Section 139 of the I.T. Act had already expired. At any rate, the subsequent payment of tax, based on the disclosure that was made prior to the notice under Section148 of the I.T. Act, led to the finalisation of the assessment for the assessment year concerned [2011-12], and in the finalised assessment, there was no addition to the income of the respondent/assessee over and in addition to what was already disclosed and admitted by him before the Revenue authorities. 9.......It will be seen from a perusal of Section 271 of the I.T. Act that it is a specific provision providing for imposition of penalties, and is a complete code in itself, regulating the procedure for the imposition of penalties prescribed. The proceedings are therefore to be conducted in accordance therewith, subject always to the rules of natural justice. The provisions for the assessment and levy of tax will not apply as such for the imposition of penalty, and when there is a specific provision, it is trite that it alone 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 ....
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.... one as was the case under Section 11AC of the Central Excise Act, the scope of which was considered by the Supreme Court in Union of India v. Dharmendra Textiles Processors - [(2008) 306 ITR 277]. It is therefore all the more necessary to strictly construe the provisions of Section 271(1)(c) to ensure that only the clear and unambiguous cases of defaults specified therein would attract a penalty. On the facts of this case, we fail to see how an assessee who disclosed his liability to tax, well before the Assessing Authority himself could determine it, can be seen as having concealed or incorrectly stated the facts leading to his liability. To invoke the penal provisions of the Act against an assessee in such a situation would throw to the winds the elements of fairness in tax administration and discourage assessees from disclosing defects in their tax returns before their Assessing Authorities. This is more so when, as in the present case, the assessee had also paid the interest on the differential 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 ....
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....hat it was not a mistake of omission and on the other hand, the mistake of omission was identified by the Assessing Officer and the assessee accepted the same without any dispute. In this situation, we are unable to accept the contention of the Commissioner of Income Tax(A) that the assessee made a wrong claim which was detected and disallowed by the Assessing Officer. Accordingly, we hold that the explanation offered by the assessee during penalty proceedings was acceptable which was wrongly rejected by the AO and the Commissioner of Income Tax(A) and penalty was not imposable on the assessee in this regard and we cancel the penalty orders. Thus, ground nos. 1, 2 and 3 of the assessee are allowed." 5.3 CIT vs. Chennupati Tyre & Rubber Products (2014) 90 CCH 0181 APHC, wherein it was held as under : "The principle that runs cutting across any systems of law is that before person is visited with punishment or penalty, the wrongful act on his part must be established. If not a deliberate intention, at least, intention, as such, 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 con....
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.... In a recent decision of the Hon'ble Supreme Court in Civil Appeal No.9772 of 2013, dated 30.10.2013 (Mak Data P. Ltd., vs. Commissioner of Income Tax-II), the Hon'ble Supreme Court while considering the Explanation to Section 271(1), held that the question would be whether the assessee had offered an explanation for concealment of particulars of income or furnishing inaccurate particulars of income and the Explanation to Section 271(1) raises a presumption of concealment, when a difference is noticed by the Assessing Officer between the reported and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence and when the initial onus placed by the explanation, has been discharged by the assessee, the onus shifts on the Revenue to show that the amount in question constituted their income and not otherwise. Factually, we find that the onus cast upon the assessee has been discharged by giving a cogent and reliable explanation. Therefore, if the department did not agree with the explanation, then the onus was on the department to prove that there was concealment of particulars of income or furnishing inaccurate particulars of income. ....
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....139(4) of the Act and which was invalid return. Thereafter, on an information in possession of the Revenue in respect of erroneous and illegitimate deductions account of deductions under Chapter VIA of the Act, it was considered after due application of mind that income to the tune of Rs. 13,87,801/- had escaped assessment on account of non filing of return and on account of such erroneous and illegitimate deduction. Based on that fact notice u/s. 148 of the Act was issued to the assessee on 26.03.2018. In response to the said notice the assessee filed return of income on 09.06.2018 declaring total income at Rs. 14,09,150/. The assessment u/s. 143(3)/148 of the Act was completed on 23.08.2018 at total income of Rs. 14,09,150/-. Thus, the returned income and assessee income becomes at the same figure. But the penalty proceedings u/s. 271(1)(c) was initiated separately by issue of show cause notice u/s. 271(1)(c) dated 23.08.2018 was issued and served upon the assessee. Thereafter, the A.O passed an order levying the penalty u/s.271(1)(c) of the I.T. Act vide order dated 12.12.2018 levying a penalty of Rs. 2,16,520/- for concealing and furnishing inaccurate particulars of income @ 20....
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..... Consequently, the appeal is wholly devoid of merits and accordingly dismissed. 12. The ld. DR relied upon the decision of the ld. AO and that of the ld. CIT(A) and also supported that considering the decision of the apex court in the case of the Mak Data P. Ltd. Vs. CIT (Supra) the penalty levied is required to be sustained. The bench noted that the in the case of Mak Data case, the AO had issued a show cause notice seeking specific information and in reply to SCN the assessee filed and made offer to surrender the income whereas in the case of the assessee is squarely covered by the decision of the jurisdictional high court in the case of Pushpendra Surana(Supra). Thus, the bench noted that it was not in dispute that the assessee has offered the income by filling the correct returned of income upon issue of notice and the assessment is completed on that returned income filed by the assessee without any change. Thus, the assessee though surrendered the income at the time of re-assessment notice by filling the return of income and has paid the tax due thereon along with the interest, thus, the said disclosure hold valid without any adjustment and made good faith volunta....
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.... and such return would not cease to be disclosure of his total income, merely because it is filed beyond the period prescribed for making assessment. In other words, it is not necessary that there should be a valid return filed before the expiry of the period prescribed for making assessment for making disclosure as envisaged under sub-clauses (a) and (c) of sub-section (1) of section 273A. Sub-clause (b) of sub-section (1) also speaks about full and true disclosure of particulars of income. So far as a case covered by clause (ii) of sub-section (1) is concerned, such full and true disclosure has to be made prior to the detection by the Income-tax Officer of concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income. Such disclosure could also be by a revised return or an application or a letter addressed to the taxing authority. Disclosure contemplated by sub-clauses (a), (b) and (c) cannot have different meanings. In other words, it has the same meaning and such disclosure could be made by a return within or beyond the prescribed time for making assessment or by a letter or an application to the taxing authority." Respectfully ....