CHANDARAKANT M. DALWADI(L/H RAJAN C. DALWADI),VADODARA vs. ITO, WARD-3(1)(3), VADODARA

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ITA 2385/AHD/2018Status: DisposedITAT Ahmedabad13 July 2022AY 2010-113 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the assessee's appeal and deleted the penalty. It was held that genuine mistakes or reasonable circumstances do not constitute concealment of income, referencing a Supreme Court decision.

What were the facts?

The assessee filed a belated return of income for AY 2010-11. The Assessing Officer initiated penalty proceedings under Section 271(1)(c) for concealment of income related to capital gains. The CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether a belatedly filed return due to the assessee's death constitutes concealment of income for penalty purposes. Whether Explanation-1 or Explanation-3 to Section 271(1)(c) is applicable.

Which sections of the Income-tax Act were involved?

Section 139,Section 148,Section 143(3),Section 147,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, AHMEDABAD “SMC-2” BENCH, AHMEDABAD

Before: Ms. SUCHITRA KAMBLE & SHRI WASEEM AHMED

For Respondent: Shri C.S. Sharma, Sr. D.R
Hearing: 17.06.2022Pronounced: 13.07.2022

PER SUCHITRA KAMBLE, JUDICIAL MEMBER :

1.

This is an appeal filed by the assessee against the order dated 05.10.2018 passed by the CIT(A)-3, Vadodara pertaining to A.Y. 2010-11.

2.

The grounds of appeal are as under:

“1. The Ld. CIT(A) has erred by considering the return filed on 07.08.2012 which is an invalid return which can NOT be considered as original return of income as prescribed u/s 139 of the Act and erroneously applied Exaplanation-1 to section 271(1)(c) of the Act despite the fact that no return of income was filed within the period prescribed u/s 139 of the Act and First return was filed in response to notice u/s 148 of the Act and therefore penalty may be imposed in terms of Exaplanation-3 to section 271(1)(c) of the Act, if it is to be levied.

2. The Ld. CIT(A) erred in rejecting the explanation of the appellant and failed to prove the explanation to be false or malafide and wrongly invoked Explanation-1 to section 271(1)(c) of the Act despite full and true

Page 2 of 3 disclosure of all the particulars of Income were submitted in the return of income were filed in response to notice u/s 148 of the Act. 3. It is therefore prayed that the penalty upheld by the Ld. CIT(A) be deleted and may be directed to modify the assessment accordingly.”

3.

The assessee filed return of income for the A.Y. 2010-11 belatedly on 07.08.2012 declaring total income of Rs.6,37,370/-. The assessee filed return of income declaring total income at Rs.10,10,510/- on 21.06.2012 in response to notice under Section 148 of the Income Tax Act, 1961. Assessment under Section 143(3) read with Section 147 of the Act was finalised on 27.07.2017 assessing the total income at Rs.10,01,510/-. Penalty proceedings under Section 271(1)(c) of the Act was initiated separately for concealment of income. The Assessing Officer observed that the assessee has shown income from business and income from other sources apart from capital gain. But in original return of income the assessee has shown the capital gain of Rs.3,64,139/-. Hence, the Assessing Officer imposed penalty of Rs.3,64,39/- thereby working at Rs.75,025/-.

4.

Being aggrieved by the penalty order the assessee filed appeal before the CIT(A). The CIT(A) has dismissed the appeal of the assessee.

5.

At the time of hearing none appeared on behalf of the assessee despite giving notice and there was no new address given to the Registry for making a fresh service. Therefore, we are proceeding on the basis of the submissions made before the Assessing Officer as well as before the CIT(A) by the assessee and take cognisance of the same.

6.

Ld. DR relied upon the assessment order penalty order and the order of the CIT(A).

7.

We have heard the Ld. D.R. and perused all the relevant material available on record. The assessee has filed submissions before the CIT(A) dated 26.03.2018 thereby stating that the assessee failed to file return of income within two years from the end of the A.Y. as the assessee expired during that period. Thus, the said delay was reasonable and genuine. The delayed return was filed in a hurried manner and there was no intention of concealment of income or filing/furnishing inaccurate particulars of income. As per the decision of the Hon’ble Supreme Court in the case

Page 3 of 3 of Price Waterhouse Coopers Pvt. Ltd. vs. CIT, 348 ITR 306 (SC), the genuine mistake or the reasonable circumstances will not treat the case of the particular assessee as concealment of income or furnishing of inaccurate particular of income. Therefore, we are allowing the appeal of the assessee and hereby delete the penalty.

8.

In the result, appeal of the assessee is allowed.

Order pronounced in the open Court on this 13th day of July, 2022.

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