Case Law Details
Gajjan Singh Thind Vs ACIT (ITAT Chandigarh)
The provisions of section 271(1)(c) of the Act are penal in nature and they are required to be strictly construed. These cannot be extended by way of liberal interpretation to include the cases, which otherwise, do not fall within the purview and scope of the provisions of section 271(1)(c) of the Act. In view of this, since the income of Rs.41,55,876/- has already been declared in the revised return, which was valid and filed within the limitation period prescribed for filing the same, hence, in view of our discussion made above, the penalty in respect of the aforesaid income declared is not leviable and the same is accordingly ordered to be deleted.
FULL TEXT OF THE ITAT JUDGEMENT
The present appeal has been preferred by the asses see against the order of the Commissioner of Income Tax (Appeals)-3, Ludhiana [(hereinafter referred to as ‘CIT(A)’] dated 24.8.2018, agitating the action of the CIT(A) in confirming the penalty of Rs.16,28,624/- levied by the Assessing Officer (in short ‘A.O.’) u/s 271(1)(c) of the Income Tax Act, 1961 (in short ‘Act’).
2. The brief facts relevant to the issue are that for the assessment year under consideration, the assessee filed original return of income on 31.7.2014 declaring a net taxable income of Rs.98,36,430/- and claimed an exempt income of Rs.41,45,665/- on account of Long Term Capital Gains. The assessee was summoned by the Dy. Director of Income Tax (Investigation) in respect of an entry regarding Long Term Capital Gains vide letter dated 30.9.2015. Thereafter the assessee filed a revised return on 8.10.2015 declaring the said income of Rs.41,55,876/- shown in the original return as Long Term Capital Gains, as “income from other sources” and paid the due taxes thereupon. Thereafter the assessment u/s 143(3) of the Act was carried out in the case of the assessee. During the assessment proceedings, the A.O. observed that the aforesaid surrender of income of Rs.41,55,876/- as “income from other sources” in the revised return, was an “undisclosed income” of the assessee as the assessee in the original return, had claimed the same to be tax exempt. Had the assessee been not summoned by the Investigation Wing, the assessee would not have revised his return to offer for taxation the aforesaid amount of Rs.41,55,876. The A.O. further observed that though the assessee had surrendered the aforesaid amount of Rs.41,55,876/- in front of the DDIT (Investigation), Ludhiana but did not submit the return (ITR-V) online to the Central Processing Centre (CPC), Bangaluru but during scrutiny assessment proceedings, the assessee offered the said income for taxation. That since the assessee had filed the revised return after commencement of scrutiny assessment proceedings and also did not submit ITR-V online to CPC, Bangaluru, he, therefore, held that it was a case of concealment of income. The A.O. further noticed that there was a difference of Rs.2,00,015/- between the amount shown by the assessee as received from share profits, which was further offered as ‘income from other sources’ and the amount actually received in the bank account of the assessee. On being asked to explain, the assessee accepted that the amount shown in computation was less and agreed to addition of the difference, amounting to Rs.2,00,015/-. The A.O. accordingly, made an addition of the aforesaid amount totaling Rs.4,35,591/- into the income of the assessee u/s 68 of the Act. The A.O. accordingly, initiated the penalty proceedings u/s 271(1)(c) of the Act. In the penalty proceedings, the A.O. held that in view of the above facts, the assessee had concealed the particulars of income amounting to Rs.43,55,891/- and levied the penalty @ 110% of the tax sought to be evaded of Rs.16,28,624/-.
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