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TMI Blog2017 (1) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... ment u/s.143 (3) of the Act,making addition of Rs. 1.92 lakhs under the head under-reported interest income.He also initiated penalty proceedings for concealing the particulars of income under section 271(a)(c) of the Act. 2. Effective ground of appeal is about upholding the order of the AO levying penalty. During the assessment proceedings, the AO found that interest income earned by the assessee on saving bank account with State Bank of India and Karnataka Bank Ltd, aggregating Rs. 1,92, 677/- was not offered to tax in the return filed by the assessee. Accordingly, the amount in question was added to the total income of the assessee, as the AO was of the opinion that the assessee has not filed any valid explanation. During the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t much lesser interest income had been offered by him in the preceding assessment years, that he had earned substantial interest income during the year under consideration, that a notice was issued to the assessee under section 142 (1) of the Act to furnish information as per earlier questionnaire issued to him that assessee was left with no other option but to admit the underreporting of interest income, that concealment of income had been done in the return of income filed and subsequent offer of such income, that in the questionnaire the assessee was directed to produce bank statements of him and his dependents, that said question would certainly lead to in pointing the omission of interest income is. Accordingly penalty at the rate of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alth and sad demise of his mother, that he had offered the saving bank interest while filing the returns for the earlier years that in the earlier years interest amount was very less as compared to the interest income for the year under consideration, that the AO had clearly brought out that he had asked for the bank statement of the assessee from which obviously the interest earned would have been detected, that the assessee offered to tax the underreported interest income, that the assessee had no option but to show the interest income during the assessment proceedings, that the cases relied upon by the assessee were of no use. He referred to the matters of HCIL Kalindee ARSSPL and Zoom Communications private Ltd.(327ITR510) and held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from other sources. House property income was computed in negative.Clearly,the assessee was aware of the procedure of filing the return and method of computing the income. It is to be remembered that assessee had earned interest income of Rs. 1.92 lakhs during the year under consideration. It is not a small amount that could be ignored by a person while filing the return. It is not the case that return was filed in the first month of the subsequent financial year and that assessee had not received the statement of interest income from the bank. Return of income is not a simple piece of paper. The assessees are supposed to not only disclose their income but also has to verify that entries made in it are correct. We find that the FAA has in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the explanation furnished by him for making such a claim is not found to be bona fide, it would be difficult to say that he would still not be liable to penalty under section 271(1)(c) of the Act. If we take the view that a claim which is wholly untenable in law and has absolutely no foundation on which it could be made, the assessee would not be liable to imposition of penalty, even if he was not acting bona fide while making a claim of this nature, that would give a licence to unscrupulous assessees to make wholly untenable and unsustainable claims without there being any basis for making them, in the hope that their return would not be picked up for scrutiny and they would be assessed on the basis of self-assessment under section 143(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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