SHUJAT DILAWAR SAYED,MUMBAI vs. ITO 21(3)(2), MUMBAI

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ITA 4441/MUM/2016Status: DisposedITAT Mumbai09 April 2018AY 2010-114 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 held that penalty under Section 271(1)(c) cannot be levied when the revised return is accepted and assessed as such, as there is no income sought to be evaded. The assessee's conduct was also not found to be contumacious.

What were the facts?

The assessee initially filed a return of income, then filed a revised return incorporating previously undisclosed bank account transactions. The Assessing Officer accepted the revised return but initiated penalty proceedings for concealing income.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when a revised return is accepted and assessed, and if the assessee's conduct warrants such penalty.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI

Before: SHRI SHAMIM YAHYA, AM & SHRI RAVISH SOOD, JM

For Appellant: Shri M. C. Omi Ningshen
For Respondent: Shri M. C. Omi Ningshen

O R D E R Per Shamim Yahya, A. M.: This appeal by the assessee is directed against the order by the Commissioner of Income Tax (Appeals) confirming the levy of penalty amounting to Rs.32,200/- u/s. 271(1)(c) of the I. T. Act.

2.

The brief facts of the case are that the assessee is in the business of fabrication/engineering works and dealing in iron and steel products. The assessee had filed the original return on 27.09.2010, declaring the income of Rs.37,810/-.

1.

2 Shujat Dilawar Sayed Subsequently, a revised return of income was filed by the assessee on 30.03.2002, declaring income of Rs.5,18,048/-. The assessee also submitted a revised audit report u/s. 44AB. In the revised report, the assessee incorporated entries of HDFC Bank account which was earlier not disclosed to the department. In the assessment order, the Assessing Officer accepted the return of income and made a adhoc disallowance of Rs.40,000/- for the expenses. The Assessing Officer also initiated penalty proceedings not with reference to any particular amount. For this, the Assessing Officer noted that while revising his return of income, the assessee has incorporated the transactions from the HDFC bank which was not disclosed in the original return.

For this, the Assessing Officer opined that this tantamount to concealing the true particulars of his income which he would not have done, if the HDFC bank account was not detected by the Department during the assessment proceedings for assessment year 2009-10. In the penalty proceedings, the penalty was imposed based upon difference between the original return of income filed at Rs.37,080/- and the revised return of income at Rs.5,58,060/-. Accordingly, penalty of Rs.32,200/- was levied.

3.

Upon the assessee’s appeal, the ld. Commissioner of Income Tax (Appeals) confirmed the penalty.

4.

Against this order, the assessee is in appeal before us.

5.

We have heard the ld. Departmental Representative. None appeared on behalf of the assessee. Upon careful consideration, we find that the income filed in return of 3 Shujat Dilawar Sayed income has been assessed by the Income Tax Officer. The return of income has been accepted by the Revenue and there is no case of levy of penalty. As in such case, the machinery provision for levy of penalty u/s. 271(1)(c) of the Act fails, as the penalty is to be levied with reference to the income sought to be evaded. Hence, when the revised return has been accepted and the income has been assessed as such, there is no case of levying of penalty with reference to any income sought to be evaded. Moreover, it is not the case that the return was revised upon any questionnaire or other aspect detected by the Assessing Officer. Hence, the conduct of the assessee was also not contumacious so as to warrant levy of penalty on the touchstone of exposition of a larger bench of Hon’ble Apex Court in the case of Hindustan Steel Ltd. vs. State of Orissa [1972] 83 ITR 26 (SC). In these circumstances, in our considered opinion, the penalty levied cannot be sustained. Accordingly, we set aside the order of the authorities below and delete the levy of penalty.

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