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Mrs. Archana Kapoor C/o. Isha Steel Treatment Pvt Ltd Versus The Income Tax Officer, Ward 23 (1) (4) Mumbai

2015 (7) TMI 400 - ITAT MUMBAI

Penalty u/s 271(1)(c) - rental income from flat omitted to be included at the time of filing of original return of income - Held that:- Nothing has been mentioned or asked from the assessee regarding rental income of the assessee, nor any details of flats owned by the assessee. Later on, when the assessee had filed a revised return on 06.11.2010 including the rental income of ₹ 1,61,880, there was no specific query or enquiry by the AO prior to this date. Neither from the assessment order .....

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ble for penalty u/s 271(1)(c).

The finding of the CIT(A) that the assessee had filed initial return with a view to conceal the income and the revised return was out of compulsion cannot be held to be correct because no such compulsion is borne out from the records, that the assessee came forward for offering the income only when the AO had carried out any inquiry or has cornered the assessee on the issue of non- offer of rental income in the original return of income. Thus, the penal .....

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sessment year 2008-2009. The assessee is mainly aggrieved by the levy of penalty of ₹ 34,917, on account of rental income from flat of ₹ 1,61,880, which was omitted to be included at the time of filing of original return of income. 2. Brief facts of the case are that, the assessee is an individual having income from house property and interest income. The return of income was filed on 29th July, 2008, declaring total income of ₹ 5,18,250. However, at the time of filing of retur .....

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ed at any time before the expiry of one year from the end of the relevant assessment year or before the completion of assessment, whichever is earlier. Here in this case, the revised return has been filed after the expiry of the said period. Further, if the assessee s case would not have been selected for scrutiny, then the rental income of ₹ 1,61,880 would have escaped from taxation. Accordingly, he initiated the penalty proceedings u/s 271(1)(c). 3. In the penalty proceedings, the assess .....

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assessment has been completed on a total income of ₹ 6,31,570/-. The assessee has filed a revised return of income since had inadvertently omitted to declare rental income of ₹ 1,61,880/- from Flat No.6, 1st floor, Atlantis Building, Kalyani Nagar, Pune. We have to submit that the assessee has received a gift of flat No.6, 1st Floor, Atlantis Building, Kalayani Nagar, Pune from her mother Mrs. Geeta Kapoor in assessment year 2007-08. During the assessment year 2007-08, the said flat .....

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was deposited by the assessee in her bank account with HDFC bank bearing Account No.005210000107744. The income with regard to the rent was reflected in the bank statement and in no way the assessee could have concealed the same. The assessee has also received interest from HDFC Bank and the same has been declared. We have to submit that since the error was inadvertent, the assessee has not filed inaccurate particulars of income within the meaning of section 271(1)(c) and as such, we shall reque .....

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d to be voluntarily because the said return was filed only when the scrutiny proceedings were started. After discussing various legal provisions and case laws in great detail, he confirmed the penalty as levied by the AO. 5. Before us, the learned Counsel submitted that, the assessee did not had any intention of not disclosing the rental income in the income tax return, firstly because, in the earlier year, the said income was duly disclosed and secondly, the assessee had claimed refund in the r .....

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the assessee later on realized that the rental income from the second flat has not been shown, therefore, revised return was filed to include the income. Even if the revised return is treated as nonest, then also the assessee s revised computation should have been taken on record, wherein this income was duly disclosed. The error was rectified by the assessee suo moto without there being any specific notice issued by the AO in this regard. Therefore, no penalty for furnishing of inaccurate parti .....

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alty has rightly been confirmed by the CIT(A). 7. We have heard the rival submissions, and also perused the relevant material placed on record. It is an admitted fact that the assessee had rental income from second flat, which she had omitted to disclose in her return of income. The said return of income was selected for scrutiny vide notice u/s 143(2) served on 22.08.2009. Thereafter, the AO had asked for the details to be furnished by the assessee, vide notice dated 01.06.2010, the content of .....

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income and details of drawings. 4. Loan confirmation in respect of loan taken and given including squared up. 5. Please file copy of Tax Audit Report, Balance Sheet, P&L A/c and personal balance sheet & Capital A/c for the year ended 31.3.08 & computation of income. 6. Name and address of the sundry debtors and creditors with age-wise. 7. Give details of all bank accounts maintained by you and produce copy of bank statement for verification. 8. Details of investment made during the .....

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