RANJITSINH ABHAYSINH PARMAR,RAJKOT vs. DCIT, CIRCLE-2(1), RAJKOT, RAJKOT

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ITA 277/RJT/2026Status: DisposedITAT Rajkot19 June 2026AY 2016-175 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that there was no conscious concealment of income as the rental income was recorded in the books and the omission was a bonafide mistake. Therefore, the penalty was deleted.

What were the facts?

The assessee inadvertently omitted to include rental income from a Singapore property in the computation of income, though it was recorded in the books. The Assessing Officer initiated penalty proceedings for concealment of income. The CIT(A) partly deleted the penalty, directing revision based on a reduced addition sustained by the Tribunal.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when income is recorded in books but inadvertently omitted from computation due to bonafide mistake, and whether there was conscious concealment of income.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”

Before: DR. ARJUN LAL SAINI

For Appellant: Shri Mehul Ranpura, Ld. AR
For Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR
Hearing: 23/03/2026

आयकरअपीलीयअिधकरण,राजकोट�ायपीठ,राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, “SMC” RAJKOT BENCH, RAJKOT

BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No. 277/RJT/2026 (�नधा�रणवष�/Assessment Year: (2016-17) Shri Ranjitsinh Abhaysinh Parmar The DCIT, Circle – 2(1), Divya Kunj, 4/5, Shramjivi Society, Vs. Aayakar Bhavan, Race Course Ring Rajkot – 360001, Gujarat Road, Rajkot – 360001, Gujarat �थायीलेखासं./जीआइआरसं./PAN/GIR No.: ACNPP0121A (अपीलाथ�/Assessee) (��यथ�/Respondent)

Assessee by : Shri Mehul Ranpura, Ld. AR Respondent by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR Date of Hearing : 23/03/2026 : 19/06/2026 Date of Pronouncement

ORDER Per, Dr. Arjun Lal Saini, AM:

Captioned appeal filed by the assessee, pertaining to Assessment Year 2016-17, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income-tax (Appeals), dated 24.12.2018, which in turn arises out of penalty order passed by the Assessing Officer u/s 271(1)(c ) of the Act.

2.

The grounds of appeal raised by the assessee are as follows:

ITA No. 277/Rjt/2026 Sh. Ranjitsinh A. Parmar “1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2. The Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [CIT(A)] erred on facts as also in law in confirming penalty of Rs.1,90,067/- in respect of addition retained by Hon’ble ITAT at Rs.4,49,198/-. The penalty confirmed is bad in law as also on facts therefore the same may kindly be deleted. 3. Your Honour's assessee craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal”

3.

Succinctly, the factual panorama of the case is that assessee before me is an Individual. The assessee’s appeal relates to Penalty u/s.271(1)(c) of the Act amounting to Rs.3,77,427/-. The facts of the case are that the assessee had income from House Property and had erroneously claimed deduction and had not offered the entire rental income for tax. In the Assessment Order dated 24.12.2018, the assessing officer computed the income from House Property at Rs. 10,90,584/-. The penalty proceedings were initiated separately for concealment of income and imposed penalty to the tune of Rs.3,77,427/-. 4. Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld.CIT(A), who has partly deleted the penalty imposed by the assessing officer stating that penalty leviable in the assessee’s case is only in respect of addition of Rs.4,49,195/- sustained by the Tribunal. Accordingly, the assessing officer was directed to replace the Penalty Order and revise penalty only on the addition of Rs.4,49,198/-. Thus, the appeal was partly allowed to the extent of revision above. 5.Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before this Tribunal. 6. I have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and

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ITA No. 277/Rjt/2026 Sh. Ranjitsinh A. Parmar other materials brought on record. I note that assessee’s first appeal against the quantum addition was dismissed by the Ld.CIT(A). During the appellate proceedings, against the penalty order, assessee had informed ld.CIT(A) that, his subsequent appeal before the Hon'ble ITAT Rajkot Bench against the order of the Ld.CIT(A), the Bench, has, vide order dated 07.08.2024 in ITA No.266/RJT/2023 allowed the claim of deduction of Rs.3,27,175/- and Rs.2,14,211/-. It was further stated by the assessee that assessing officer has vide order dated 21.10.2014 revised the addition to Rs.4,49,198/- (10,90,584 - 5,41,386). Therefore, learned CIT(A) held that penalty leviable in the current case is only in respect of addition of Rs.4,49,195/- sustained by the Tribunal. Accordingly, the assessing officer was directed by ld.CIT(A) to replace the Penalty Order and revise penalty only on the addition of Rs.4,49,198/-. Thus, the ld.CIT(A) allowed the appeal partly. The ld. Counsel for the assessee submitted that while filing the return of income, there was bonafide mistake on the part of the Accountant of the assessee and therefore this penalty may be deleted. On the other hand, learned DR for the revenue relied on the findings of the penalty order. 7. I note that assessee's income falls under the category of higher income group where income is exceeding rupees one crores. Regular books of accounts are maintained. The major source of income is salary, house property and income from other source. During the year under consideration assessee was in receipt of rental income of Rs. 10,90,584/- from his Singapore Flat. The said amount has been credited in the books of account but inadvertently remained to be added in the computation of income. The assessee is basically an Engineer and as such has to rely on the subordinate who prepares such data in the income tax return (ITR). However, as soon as it was brought to his notice, the assessee vide his letter dated 16.12.2018 has requested the assessing officer to add the same as income from house property

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ITA No. 277/Rjt/2026 Sh. Ranjitsinh A. Parmar and due relief u/s 24 of the Act, being the interest on housing loan be allowed.I note that so far as levy of penalty on such default is concerned, I find that in order to justify levy of penalty there must be some material or circumstances leading to reasonable conclusion that the amount of conscious concealment or act of furnishing of inaccurate particulars. Hon'ble High Court of Gujarat has in the case of National Textiles vs. CIT 249 ITR 125 (Gui) has observed that "In order to justify the levy of penalty, two factors must coexist (i) there must be some material or circumstances leading to the reasonable conclusion that the amount does represent the assessee's income. It is not enough for the purpose of penalty that the amount has been assessed as income and (ii) The circumstances must show that there was animus, that is, conscious concealment or act of furnishing of inaccurate particulars on the part of the assessee."

8.

Therefore, I note that receipt of rental income from Singapore property has already been recorded in the books of account and was part of the return of income but in the computation of income it remained to be shown. Thus, there is no case of hiding of any particulars or to conceal any particulars of income from the eyes of the revenue. That is, there is no any conscious concealment on the part of the assessee. Based on these facts and circumstances, I delete the penalty.

9.In the result, the appeal of the assessee is allowed.

Order is pronounced in the open court on 19/06/2026. Sd/- (Dr. Arjun Lal Saini) लेखा सद�/Accountant Member राजकोट/Rajkot िदनांक/ Date: 19/06/2026 Copy of the order forwarded to :  The assessee

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ITA No. 277/Rjt/2026 Sh. Ranjitsinh A. Parmar  The Respondent  CIT  The CIT(A)  DR, ITAT, RAJKOT  Guard File /True copy/ By order

Assistant Registrar/Sr. PS/PS ITAT, Rajkot

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