Penalty u/s. 271(1)(c) unjustified as voluntary deposit was done before receipt of notice u/s 148

Pradip Burman Vs DCIT (ITAT Delhi)

ITAT Delhi held that imposition of penalty under section 271(1)(c) of the Income Tax Act unjustified as voluntary deposit of tax was done before receiving notice under section 148 of the Income Tax Act.

Facts- The assessee came to know about the information and approached the ADIT, Investigation on his own and offered to pay income tax on the alleged deposit in the alleged HSBC Bank account.

While making the offer the assessee categorically stated that he is willing to deposit the tax on the condition that such deposit should not be considered as his admission of guilt even before receiving the notice u/s. 148 of the Act the assessee paid taxes on the income offered for taxation which was US $ 40,000 in A.Y. 2006-07 and US $ 32.13 lacs in A.Y.2007-08.

Though the assessment was completed for the impugned assessment years by making the respective additions. The AO also levied penalty u/s. 271 (1) (c) of the Act. In A.Y. 2006-07 the CIT(A) deleted the penalty whereas A.Y.2007-08 he confirmed the levy.

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