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Sanjeev Garg, Ghaziabad vs. ACIT, Ghaziabad - (Income Tax Appellate Tribunal) (23 Jul 2021)

Penalty provisions are applicable only when there is a failure to furnish returns or there is concealment of income or furnishing of inaccurate particulars before the Assessing Officer

MANU/ID/0546/2021

Direct Taxation

The assessee is an individual and earned income from purchase and sale of properties and shown income under the head capital gain. The assessee claim loss of Rs. 1,50,000 from house property as the interest paid on house loan. He also claimed deduction of Rs. 1,00,000. The assessee filed his return of income electronically declaring total income of Rs. 56,95,330. The assessment was completed under Section 142(3) of Income Tax Act, 1961 (IT Act) thereby making addition of Rs. 9,38,333 in respect of difference found in calculation sheet of capital gain. Thus, his total income was assessed at Rs. 66,33,660, penalty notice under Section 271(1)(c) of IT Act was issued. The penalty order under Section 271(1)(c) of the IT Act was passed, thereby imposing penalty of Rs. 1,93,296. Being aggrieved by the penalty order, the assessee filed appeal before the CIT (A). The CIT (A) dismissed the appeal of the assessee.

The penalty notice is on both the limbs but the penalty order is restricting itself to that of furnishing of inaccurate particulars. The calculation sheet of capital gain which was filed by the assessee during the assessment proceedings as clearly set out that there was a difference of Rs. 9,38,333 which was subsequently offered for tax by the assessee. The assessee submitted that, the same was inadvertently done and was not deliberate. It is pertinent to note that the assessee after receiving the notice under Section 143(2) of IT Act filed revised computation after coming to the knowledge that the assessee has filed the calculation sheet of the capital gains and offered the same for taxation. Thus, the assessee has admitted the mistake before the Assessing Officer could detect such omission. Thus, it is not a case of furnishing of inaccurate particulars or concealment of income before the Assessing Officer.

Section 271 of the IT Act comes into picture, when there is a failure to furnish returns or there is concealment of income or furnishing of inaccurate particulars before the Assessing Officer. But in the present case before the Assessing Officer, all the relevant facts were already available and the mistake has been rectified by the assessee prior to the mistake pointed out by the Assessing Officer to the assessee during the assessment proceedings. Therefore, the order of the CIT(A) is not correct, as there is no concealment of income or furnishing of inaccurate particulars. The penalty levied under Section 271(1)(c) of the IT Act is therefore quashed. The appeal of the assessee is allowed. Thus, it does not amount to inaccurate furnishing of particulars or concealment of income tax. Appeal allowed.

Tags : PENALTY   LEVY   VALIDITY  

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