DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(1), KOLKATA, KOLKATA vs. RADHESHYAM AGARWALA, KOLKATA

Facts

A search was conducted on certain share brokers, which subsequently led to a search on the assessee's son. The son provided an undertaking to disclose amounts in the father's (assessee's) case. The assessee filed returns in response to a Section 153C notice, which were accepted by the AO without any further additions. The AO levied penalties under Section 271(1)(c) and Section 270A for various assessment years, which the CIT(A) subsequently deleted.

Held

The tribunal upheld the CIT(A)'s decision, ruling that penalties under Section 271(1)(c) and Section 270A were not leviable. It found that no search was conducted directly on the assessee, the returns filed under Section 153C were accepted without additions, and no incriminating material was used. Citing High Court judgments, the tribunal concluded that once returned income is accepted and considered as a return filed under Section 139(1), no penalty for concealment or misreporting of income can be levied. The revenue's appeals were dismissed, and the assessee's cross-objections, being in support of the CIT(A)'s order, were also dismissed as infructuous.

Key Issues

Whether penalties under Section 271(1)(c) or Section 270A are leviable when returns filed in response to a Section 153C notice are accepted without additions, and no search was conducted directly on the assessee.