TMI Blog2022 (2) TMI 1429X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the only source of income for the captioned year) on which taxes had been duly withheld by the payer. Therefore, the assessee is conscious of the fact that the Income Tax Department is aware about his having earned income, but was of the mistaken view that once taxes have been deducted on this income, the assessee was not required to be filed return of income. Therefore, in our view, this is not a fit case for levy of penalty - Decided in favour of assessee. - Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : Shri A.C. Shah, A.R. For the Revenue : Shri Vijay Kumar Singh, Sr. D.R. ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This appeal has been filed by the assessee against the penalty order u/s 271(1)(c) of the Income Tax Act, 1961 ( Act ) passed by ld. CIT(A)- 7/84/16-17 vide order dated 01-09-2017 for the assessment year 2008-09. The assessee has raised the following grounds of appeal before us: - 1. The learned C1T(A) has erred in confirming the penalty of Rs. 10,72,242 under Section 271(l)(c) in as much as the assessee has not committed the default contemplated under Section 271(l)(c). 2. The penalty order is bad i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee that return of income had not been filed by him since he was under the bona-fide belief that since tax has been deducted at source, there was no need for him to file the return of income. The Assessing Officer however did not agree with the contention of the assessee and levied penalty of Rs. 10,72,242/- u/s. 271(1)(c) of the Act being 100% amount of tax sought to be evaded. 3. Before the ld. CIT(A), the assessee submitted that failure to furnish the return per se did not amount to concealment of income or furnishing inaccurate particulars of income. Explanation-3 to section 271(1)(c) provides that where any person fails to furnish return without reasonable cause, only then it is deemed to have concealed the particulars of income. However, in this case, the assessee did not file return of income as he was under the bona-fide impression that there is no need to file the return of income since the tax has been deducted at source. The assessee had reasonable cause for not furnishing return of income since TDS was deducted from the interest earned and interest income was the only source of income for the assessee during the captioned year. Therefore, the assessee had discharge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same on face-value and that he cannot differ from the appellant's view point. 3.2.2 Explanations to Section 271(l)(c) which has been reproduced above clearly shows that the words in question are deemed to have concealed the particulars of his income in respect of such assessment year.............. , These are the words which have been used-by the AO while initiating penalty proceedings during the assessment proceedings. The penalty has also been levied for concealment of particulars of income since the penalty order passed by the AO clearly mentions that he has levied the penalty by applying the Explanation 3 to Section 271(1)(c) of the Act, In view of the discussion above, I see no reason to disagree with the view taken by the AO and I am of the opinion that the penalty was correctly levied, by the AO. The penalty of Rs.10,72,242/- levied u/s.271(l)(c) of the Act is confirmed. 4. In the result, the appeal is dismissed. 4. Being aggrieved by the order of ld. CIT(A), the assessee is in appeal before us. The Authorized Representative of the assessee submitted that the CIT(A) has erred in confirming penalty of Rs. 10,72,242/- u/s. 271(1)(c) of the Act without appreciating the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was a mistake at the time of filing the return of income and there was no intention whatsoever to conceal any particulars of income. The assessee pointed that M/s. Crisil Ltd. had deducted tax at source on the payment made to the assessee and in such circumstances, there was no reason for the assessee not to declare the aforesaid item of income in the return of income. The assessee pointed out that when the mistake was pointed out by the Assessing Officer, the assessee readily agreed to the addition and therefore the imposition of penalty u/s. 271(1)(c) of the Act was not called for. The explanation of the assessee was however rejected by the Assessing Officer. 5.1 On appeal by the assessee, the CIT(A) confirmed the order of Assessing Officer. The ITAT Kolkata decided in favour of the assessee and held that circumstances show that there was neither an attempt to conceal particulars of income by the assessee nor to furnish inaccurate particulars. Accordingly, ITAT deleted the imposition of penalty u/s. 271(1)(c) of the Act while passing the order, the ITAT observed as under:- 8. We have considered the orders of AO and CIT(A) and also the facts and circumstances of the case and are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts database will be captured by the Revenue. We have seen that the authorities below have used the strong words like habitual tax evader against the assessee which in our humble and respectful submissions are not correct observations of the authorities below and we direct that all such words used by the authorities below stand expunged from the orders of the authorities below. The citizens and the taxpayers of this country are participant in the nation building and also contributor to the exchequer and to use such harsh words against them are not warranted except in exceptional proven cases. In our considered view, the conduct of the assessee was not mala-fide and contemptuous and the assessee had come forward by offering a bona-fide explanation about the error committed by the online tax return filing portal Taxspanner and hence in our considered view, the assessee is not liable for penalty u/s 271(1)(c) of the Act as the case is covered by the exceptions as contained in the explanation 1(B) to Section 271(1)(c) of the Act. 7. In our view, the facts of the above case-laws are applicable to assessee s set of facts as well. The assessee s interest income was subject to tax deducted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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