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2020 (12) TMI 852 - AT - Income TaxPenalty u/s 271(1)(c) - Undisclosed bank accounts in which contract receipts were deposited - Defective notice - whether, Ld. AO without striking out one of the limb i.e. furnishing of inaccurate particulars of income or concealment of income can levy penalty under section 271(1)(c)? - HELD THAT:- Admittedly assessee had not disclosed to bank accounts in which contract receipts were deposited. While passing penalty order, we note that penalty is levied for concealment as there was material on record to show that bank accounts contained undisclosed income of assessee. This fact is discernible from the assessment order. In the assessment order Ld. AO initiated both the limbs, i.e; concealment and filing of inaccurate particulars. We therefore do not agree with the argument advanced by Ld. AR alleging the validity of notice issued under section 274. Assessee filed revised balance sheet after reconciling/explaining the credits in the above said accounts. The assessment order was then passed after verifying all the details by making an addition on account of unaccounted contract receipts amounting to ₹ 7 lakhs. By producing bank accounts, assessee had displaced the presumption that failure to return the correct income had arisen from any fraud or gross or willful neglect. We also note that no specific addition had been made in the assessment order on this account. No discrepancy having noted by Ld. AO in respect of the 2 accounts except for the fact that assessee had not maintained accounts in respect of the 2 bank accounts declared subsequently. We do not find assessee to be liable for concealment under section 271(1)(c) as during assessment proceedings assessee demonstrated his bona fides. Further assessee has also not filed any appeal against the addition made towards such bank accounts. Thus the conduct of assessee deserves the penalty to be deleted. Penalty levied for delay in uploading the audit report within the due date - HELD THAT:- There has not been assessee has never been held for such default in the preceding years as noted by Ld. AO. We also note that the reason submitted by assessee for the delay in filing of audit report was due to ill-health during the relevant period. There is nothing on record to prove anything contrary by revenue, to what has been submitted by assessee before authorities below or before us. We do not find the conduct of assessee to be malafide under such circumstances. AO at the time of assessment proceedings had the benefit of audit report and therefore in our view levy of penalty should be liberally construed. We therefore do not find any reason to sustain the present penalty. Accordingly grounds raised by assessee in this appeal stands allowed.
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