JAGDEEP SINGH BHATI,NEW DELHI vs. ITO, NEW DELHI

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ITA 1471/DEL/2016Status: DisposedITAT Delhi07 July 2016AY 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 the revised return was filed before the notice under section 143(2) was issued. Therefore, the voluntarily offered income in the revised return could not be considered concealed income attracting penalty.

What were the facts?

The assessee filed a revised return declaring additional interest income after the AO issued a notice under section 143(2). The AO rejected the revised return and imposed a penalty for concealed income.

What were the issues?

Whether a penalty under section 271(1)(c) can be imposed when a revised return declaring additional income is filed before the issuance of a notice under section 143(2).

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(2),Section 139(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES : SMC-I: NEW DELHI

Before: SHRI R.S. SYAL

For Appellant: Shri R.K. Tandon &, Ms Pooja Rohatgi, CAs
Hearing: 07.06.2016Pronounced: 07.06.2016

ORDER This appeal by the assessee is directed against the order passed by the CIT(A) on 8.1.2016 confirming penalty of Rs.67,233/- imposed by the Assessing Officer (AO) u/s 271(1)(c) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2010-11.

2.

Briefly stated, the facts of the case as recorded in the assessment order are that the assessee filed his return declaring income of Rs.4,20,426/-. A revised return was filed on 22.3.2011, inter alia, declaring interest income of Rs.2,38,993/-. The AO recorded that since the revised return was filed after the issue of notice u/s 143(2), the same was liable to be rejected. He made an addition of Rs.2,38,993/-, being the undisclosed interest income, on which such penalty was imposed, which came to be upheld in the first appeal.

3.

I have heard the rival submissions and perused the relevant material on record. The AO has imposed the penalty qua the interest income of Rs.2,38,993/- which was offered by the assessee in the revised return of income on the ground that such revised return was filed after the issue of notice u/s 143(2) of the Act. I have gone through a copy of notice issued u/s 143(2) which is available on page 3 of the paper book filed today. It is apparent from a copy of this notice issued by the ITO, Ward 48(2) that such notice was issued on 25.8.2011. This also bears the stamp of the Income-tax Officer, Ward 48(2), New Delhi.

As against this, the assessee filed his revised return of income on 22.3.2011, which is manifest from the recording made on page 1 of the assessment order itself. The ld. DR has not brought out any other notice issued by the AO before the filing of revised return. Thus, it is evident that the revised return declaring interest income of Rs.2,38,993/- was filed much prior to the issue of notice u/s 143(2) on 25.8.2011. When the revised return is filed within the time limit permissible u/s 139(5) of the Act before any communication or notice from the AO about the income, which forms part of the revised return, obviously, there can be no question of treating such voluntarily offered income as concealed income attracting penalty u/s 271(1)(c) of the Act. As, in the instant case, the revised return declaring interest income of Rs.2,38,993/- was filed before the issue of notice u/s 143(2), there cannot be any case for imposing or confirming any penalty u/s 271(1)(c) of the Act. I, therefore, order for the deletion of penalty.

4.

In the result, the appeal is allowed.

The order pronounced in the open court on 07.06.2016.

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