APARNA S. TODI,MUMBAI vs. ACIT, CC--1, MUMBAI

This appeal by the assessee is arising out of the order of the CIT (A)-6, Mumbai passed in appeal No.CIT (A)-36/AP.178/14-15 dated 01-01-2015. Assessment was framed by the DCIT, CC-1, Mumbai for the assessment year 2010-11 vide his order dated 11-03-2013 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter “the Act”). The penalty under dispute was levied by the ACIT, CC-1, Mumbai u/s 271 (1) (c) of the Act vide his order dated 30-09-2013.

The only issue in this appeal of the assessee is against the order of the CIT (A) sustaining the penalty levied by the AO u/s 271 (1) (c) of the Act on account of furnishing of particulars of undisclosed income of minor children‟s income and undisclosed professional receipts. 3. Briefly stated facts are that during the course of assessment proceedings the AO noticed from the TDS certificates issued by UBI and Exim Bank in favour of the assessee‟s minor children viz. Master Shreyas S. Todi and Miss Saumyaa S. Todi, the income in respect of which was not included by the assessee of the following:- Name Bank interest (Rs.) TDS (Rs.) Miss Saumyaa Todi 13,91,954 1,40,086 Master Shreyas Todi 1,79,026 18,159 15,70,980 1,58,245 According to the AO, the assessee has not included the minor children‟s income to the extent of Rs.15,76,026/- in the income of the assessee and accordingly, addition was made. Similarly, the AO noticed from the reconciliation of TDS as per 26 AS and that the income offered with the return of income. According to the AO, there is discrepancy Rs.1,20,000/- in the professional receipts. Accordingly, the AO added this undisclosed professional receipts to the extent of Rs.1.20 lacs to the returned income of the assessee. On both the counts, the AO initiated penalty proceedings u/s 271 (1) (c) of the Act for furnishing of inaccurate particulars of income and also for concealment of income. The assessee has not challenged this quantum addition and accepted the same as it is. The AO initiated penalty proceedings u/s 271 (1) (c) of the Act in respect to both the additions and levied penalty @ 100% of tax evaded on the income at Rs.5,07,300/-. Aggrieved, the assessee preferred appeal before the CIT (A) who also confirmed the action of the AO. Aggrieved, now the assessee is in second appeal before the Tribunal.

I have heard the rival contentions and gone through the facts of the case. I find from the records that the assessee has filed explanation that this interest of minor children was neither clubbed by the assessee in her husband‟s hand nor in her hand due to inadvertent error and finally the assessee filed TDS certificates and declared “minors” income in her hand before the AO during the course of scrutiny assessment proceeding for tax. According to the learned Counsel for the assessee now before me, the assessee herself offered this income and there was no detection by the Department. According to the learned Counsel for the assessee this was a voluntary disclosure and the assessee also filed TDS certificates of UBI and Exim Bank issued in the name of the assessee‟s minor children viz. Master Shreyas S. Todi and Miss Saumyaa S. Todi. According to the learned Counsel once this is explained and the explanation offered by the assessee has not been held to be false or untrue, the penalty for concealment cannot be levied. In respect to undisclosed receipts it was explained that the assessee has received professional fees from M/s. Ajanta Offset and Packaging Ltd. amounting to Rs.1.20 lacs of which TDS was deducted but could not disclose in the return of income due to inadvertent mistake. It is a fact that this receipt suffered TDS and no claim in respect to TDS was also made. Accordingly to the learned Counsel this is purely a mistake, which is bona fide, penalty cannot be levied on this. But the AO or the CIT (A) did not believe the explanation of the assessee on both the counts and levied penalty. I find from the records that none of the authorities below has held the explanation of the assessee as false or rejected the explanation. I find that the explanation of the assessee is bona fide because this income left due to inadvertent mistake as there was no intention of the assessee to conceal the income. In terms of the above, I delete the penalty and allow the appeal of the assessee.