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Facts
The assessee, an employee of BCCL Bhowra Colliery, filed a return declaring income of ₹ 2,65,920. A notice under Section 148 was issued alleging a discrepancy with the Form-16 income of ₹ 6,38,080, leading to an escaped assessment of ₹ 3,72,160 for AY 2015-16. The Assessing Officer assessed income at ₹ 6,38,000 and initiated penalty proceedings.
Held
The Tribunal held that the imposition of penalty under Section 271(1)(c) is not automatic and requires proof of deliberate and willful furnishing of inaccurate particulars of income. In this case, the Assessing Officer and the CIT(A) failed to bring on record evidence to justify the penalty imposition, and the mens rea of the assessee was not proven.
Key Issues
Whether penalty under Section 271(1)(c) of the Income Tax Act, 1961, was rightly imposed on the assessee for furnishing inaccurate particulars of income, without sufficient evidence of mens rea.
Sections Cited
148, 271(1)(c), 139, 250
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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI RATNESH NANDAN SAHAY
Assessee represented by Shri Jitendra Kumar Singh, CA Department represented by Shri Khubchand T. Pandya, Sr.DR Date of hearing 09/01/2025 Date of pronouncement 18/02/2025 O R D E R PER: RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER: 1. This appeal by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals), [in short, the ld. CIT(A)] dated 14/03/2023 for the Assessment Year (AY) 2015-16 as per the grounds of appeal on record.
2. Brief facts of the case are that the assessee is an employee of BCCL Bhowra Colliery, derives income from salary. Return of income was filed by the assessee on 12/08/2015 and declared total income at ₹ 2,65,920/- and claimed a refund of ₹ 54,190/-. Notice under Section 148 of the Income Tax Act, 1961 (in short, the Act) was issued to the assessee on 16/01/2019 after taking prior approval of the JCIT, Range-1, Dhanbad on the ground that the assessee had shown total income at ₹ 2,65,920/- whereas the total income reflected in Form- 16 issued by the employer was at ₹ 6,38,080/-. Thus, there was a difference of Bishwa Nath Ganguli Vs ITO ₹ 3,72,160/- which has escaped assessment for the A.Y. 2015-16. The Assessing Officer after giving reasonable opportunity of being heard to the assessee, finally assessed the income at ₹ 6,38,000/- and also initiated penalty under Section 271(1)(c) of the Act for furnishing inaccurate particulars of income.
During the penalty proceedings, after giving adequate opportunity of being heard to the assessee, the Assessing Officer imposed penalty under Section 271(1)(c) of the Act of ₹ 54,194/- being 100% of tax sought to be evaded.
Aggrieved by the order of Assessing Officer, the assessee filed appeal before the ld. CIT(A), who confirmed the penalty imposed by the Assessing Officer vide the impugned order on the ground that the assessee has failed to give reasonable explanation that why he had filed inaccurate particulars of income. Aggrieved by the order of ld. CIT(A), the present appeal has been filed before us.
We have heard the submissions of learned Authorised Representative of the assessee and the learned Senior Departmental Representative (ld. Sr.DR) for the revenue. It is found that though there was a difference between two incomes shown initially i.e. (i) return filed under Section 139 and another under Section 147 of the Act, however, neither the Assessing Officer nor the ld. CIT(A) have brought on record to justify the imposition of penalty imposed under Section 271(1)(c) of the Act for filing inaccurate particulars of income as under the penalty proceedings under Section 271(1)(c) of the Act it was the responsibility of Assessing Officer to bring out evidence on record to justify the imposition of penalty but in the present case that has not been done. The