CHETAN KHARA,KOLKATA vs. INCOME TAX OFFICER, WARD-34(3), KOLKATA, KOLKATA

After hearing the rival contentions, we find that the assessee filed return of income for the impugned assessment year 2004-05 on 26.04.2010 in response to the notice u/s 148 of the Act, declaring total income of Rs.2,57,794/-. The AO completed the assessment u/s 143(3) of the Act assessing the total income of the assessee at the same figure of Rs.2,57,794/-. Penalty u/s 271(1)(c) of the Act was initiated as the assessee had shown additional income of Rs.1,48,.540/- in the revised return of income. Thereafter penalty was levied.

Penalty in this case has been initiated in the assessment order, which is passed on the return of income filed by the assessee, where the assessee had declared income of Rs.2,57,794 and the AO assessed the income on the same figure. There is no addition whatsoever by the AO. When there is no variation in the income returned and the income assessed and as the revised return of income has been accepted, no penalty u/s Khara A.Y.2004-05 2 271(1)(c) of the Act lies. Penalty u/s 271(1)(c) for concealment of income or furnishing of inaccurate particulars is in relation to the income declared in the return of income based on which the assessment has been framed. In case on hand there is no finding that theere was concealment of income or furnishing inaccurate particulars of income in the revised return of income filed, based on which the assessment has been done and there is no finding that the additional income declared in this revised return of income was deemed concealed income which arose out of investigation by the revenue. Even otherwise nowhere in the penalty order the AO has stated the charge for which penalty is levied u/s 271(1)(c). There is no specific charge stating as to whether the assessee has concealed his income or whether he has furnished inaccurate particulars of income. The penalty levied is bad in law on this ground also. Thus we cancel the penalty levied and allow the appeal of the assessee.

In the result the appeal of the assessee is allowed.