Niripraj Singh Sohal Vs ITO (ITAT Delhi)
In Niripraj Singh Sohal Vs ITO, the ITAT Delhi partly allowed the assessee’s appeal and reduced the penalty levied under Section 271(1)(c) of the Income Tax Act by recalculating the “tax sought to be evaded” after adjusting TDS and self-assessment tax.
The core issue before the Tribunal was the levy of penalty of Rs. 8,56,794/- under Section 271(1)(c) for concealment of income for Assessment Year 2015-16. The assessee had not filed his return of income despite having salary income, interest income and other transactions reflected on the department’s Insight portal. Consequently, the Assessing Officer issued a notice under Section 148. In response, the assessee filed a return declaring income of Rs. 33,56,127/-. The reassessment was completed at the same income and penalty proceedings were initiated. The Assessing Officer imposed penalty of Rs. 8,56,794/- computed at 100% of the tax sought to be evaded. The Commissioner (Appeals) upheld the penalty, observing that the income would have escaped assessment if the case had not been reopened and that the return was filed only after notice under Section 148.
Before the Tribunal, the assessee argued that since the reassessment was completed at the returned income, no penalty should be levied. It was also contended that substantial tax had already been paid in the form of TDS and self-assessment tax prior to issuance of notice under Section 148. The details showed total tax payable of Rs. 8,56,794/-, out of which TDS of Rs. 7,09,902/- and self-assessment tax of Rs. 60,900/- had already been paid before issuance of notice. The balance tax paid after issuance of notice was Rs. 85,992/-. The assessee made an alternate plea that penalty should be restricted to Rs. 85,992/- in terms of clause (c) of Explanation 4 to Section 271.
