Penalty attracted on Bank Interest not disclosed in Return despite non claim of TDS

When assessee fails to receive TDS certificates on interest income from banks in time but decides neither to declare the income in his return nor to take credit for the TDS on the basis of duplicates collected, penalty u/s 271(1)(c) is warranted in such a case

Sanjay S. Shah Vs. DCIT  (ITAT Ahemdabad)– The fact that the assessee got credit of TDS u/s 154 proceedings in fact goes against the assessee. When the assessee received TDS in respect of some FDRs, and not in respect of other FDRs as claimed by him, he should have obtained the duplicate certificates and should have filed them with the return of income showing total interest received by him. Instead, he chose not to show the interest income to the extent of Rs. 2,11,172/-.

When the A.O. on the basis of AIR information taxed this amount, to take the credit of TDS he obtained the duplicate certificate. As a matter of fact this exercise should have been done by him before filing the return of income. This conduct of the assessee creates doubt about the bona fides of the assessee and, therefore, it cannot be said that default on the part of the assessee in not showing interest income was attributable to reasonable cause.

ITAT Ahemdabad

Sanjay S. Shah Vs. DCIT

I.T.A. No. 432 / Ahd/2011

(Assessment year- 2006- 07)

Date of Decision- 17^th June, 2011.