Case Law Details
Gautam Hiralal Gandhi Vs DCIT (ITAT Mumbai)
In the present case, the levy of penalty under Section 271(1)(c) of the Act is agitated by the assessee stating that notice issued dated 11th June, 2019, under section 274 read with section 271(1)(c) of the Act none of the twin charges were struck off by the learned Assessing Officer. Further, in the assessment order also, the learned Assessing Officer was not sure whether the assessee has furnished inaccurate particulars or has concealed the income. In such circumstances, the penalty levied by the learned Assessing Officer suffers from severe defects. The issue is squarely covered in favour of the assessee by the decision of Hon’ble Supreme Court in case of SSA’S Emerald Meadows (supra). The learned CIT(A) is not correct in upholding the penalty on this ground. Further, on the merits of the case, the income has already been offered in the hands of partnership firm which has already been taxed when order under section 143(3) of the Act was passed in case of partnership firm on 27th November, 2018. The learned Assessing Officer despite showing the above facts, has taxed the income of interest income in the hands of the assessee. In fact, the income does not belong to the assessee but to the partnership firm. Therefore, this addition could not have been made in the hands of the assessee. However, we find in the penalty proceedings also assessee submitted the complete information. The explanation given by the assessee clearly shows that there is neither concealment of income nor furnishing of inaccurate particulars of income. The only fault of the assessee was of claiming Tax deducted at source wrongly. The learned Assessing Officer should have refused the credit of such TDS but should not have taxed interest income in the hands of the assessee. Therefore, even on the merits the penalty under section 271(1)(c) of the Act cannot be levied.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
01. This appeal is filed by the assessee against the order passed by the Commissioner of income-tax (Appeal) [the learned CIT(A)], National Faceless Appeal Centre (NFAC) dated 29th June, 2021 for A.Y. 2016-17, wherein the penalty levied under Section 271(1)(c) of the income tax Act, 1961 (the Act) by ACIT, Circle 21(1), Mumbai of Rs.1,10,000/- was confirmed. Therefore, assessee is in appeal on this solitary issue.
02. Briefly stated facts shows that the assessee is an individual engaged in the business of plastic products. He filed return of income on 15th October, 2015 at a total income of Rs.1,22,83,260/-. The assessment under section 143(3) of the Act was passed on 21st December, 2018.
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