2010 (9) TMI 1158 - AT - Income Tax

Summary

Issues involved: Penalty u/s 271(1)(c) of the Income Tax Act for non-disclosure of tax perquisites in the original return of income for A.Y. 2003-04 and A.Y. 2004-05.

For A.Y. 2003-04: The assessee, an employee of a foreign company, voluntarily filed a revised computation of income with CIT-V Pune declaring revised total income. The tax perquisites were included, and incremental tax was deposited along with interest u/s 201(1A). The AO initiated penalty proceedings u/s 271(1)(c) which was challenged before CIT(A) and subsequently deleted based on bonafide explanation and voluntary disclosure.

For A.Y. 2004-05: The assessee, an employee of two companies, filed a return of income declaring salary from both companies. The taxes on salary from one company were deducted and paid, while the other company bore the tax liability. Upon discovering potential underreporting, the employer voluntarily reported and deposited the incremental tax. The AO initiated penalty proceedings, which were deleted by CIT(A) and upheld by the Tribunal based on voluntary disclosure and lack of justification for penalty imposition.

Conclusion: The penalty u/s 271(1)(c) for non-disclosure of tax perquisites in the original return of income was deleted by CIT(A) and upheld by the Tribunal for both A.Y. 2003-04 and A.Y. 2004-05, considering the voluntary disclosure, bonafide explanation, and lack of justification for penalty imposition.