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Income Tax Appellate Tribunal, Kolkata Bench, KOLKATA
Before: SHRI N. V. VASUDEVAN & SHRI M. BALAGANESH,
ORDER Per M. BALAGANESH, AM
This an appeal preferred by the assessee against the order of the Ld. CIT(A)- XIV, Kolkata, dt. 26.03.2014, levying penalty u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”).
The only issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in confirming the levy of penalty u/s 271(1)(c) of the Act, in the facts and circumstances of the case.
2 Assessment Years: 2008-09 Chaitali Saha 3. Brief facts of the case is that the assessee is an individual deriving income from salary from “Air India” and interest income on deposits. The return of income was filed by the assessee declaring only salary income. The Ld. AO obtained information in AIR, wherein he observed that the assessee had received interest income to the tune of Rs.4,76,423/- which had not been offered by the assessee in the return. The assessee explained that she was suffering from breast cancer and was moving for treatment at Hinduja Hospital at Mumbai & CMRI at Kolkata and she could not obtain the bank statement in time, in order to offer the interest income in the return. Accordingly, she could not offer the interest income on accrual basis. It was also pleaded by the assessee that she was contemplating to offer the income on receipt basis instead of on accrual basis. The Ld. AO completed the assessment after adding the interest income on accrual basis and proceeded to levy penalty u/s 271(1)(c) of the Act thereon. The levy of penalty was confirmed by the Ld. CIT(A) in first appeal.
Aggrieved the assessee is in appeal before us on the following grounds of appeal: 1). That the Learned Commissioner of Income-Tax (Appeals) erred in confirming the Penalty of Rs.1,98,991/- imposed u/s 271(1)(c) of the I.T. Act which is bad in Law, void and against the principle of natural justice. 2). That the Appellant craves leave to urge the additional grounds of appeal at the time of hearing.
3 Assessment Years: 2008-09 Chaitali Saha 5. The assessee placed written submissions before us explaining the entire facts of the case and adducing evidence for her illness and medical treatment undergone by her during the relevant time. Since the assessee did not have any business income, she was contemplating to offer the interest income on receipt basis instead of, on accrual basis. The inability of the assessee due to prolonged illness had contributed for not offering the said interest income on accrual basis in the original return of income and the same itself would constitute reasonable cause in terms of Section 273B of the Act, and accordingly pleaded for cancellation of the penalty levied by the Ld. AO. In response to this the Ld. DR, vehemently relied on the orders of the lower authorities.
We have heard the rival submissions and perused the materials available on record. We find lot of force in the arguments of the Ld. AR, that due to the inability of the assessee in obtaining the bank statements for offering interest income on bank deposits in the original return of income as she was suffering from breast cancer and was undergoing treatment thereon. This, in our considered opinion, would definitely constitute reasonable cause in terms of Section 273B of the Act and we hold that the assessee in the facts and circumstances of the case was prevented from reasonable cause and hence the assessee should not be invited that the levy of penalty thereon. Accordingly, the grounds raised by the assessee are allowed.