SHREE MUNEESH D CHADDA,MUMBAI vs. ITO 12(2)(4), MUMBAI

This appeal filed by the assessee is against the order of the CIT (A)-23, dated 14.10.2014 for the assessment year 2009-2010. In this appeal, assessee raised the following solitary ground and the same reads as under:- “In the facts and circumstances of the case and in law, the Ld CIT (A) has grossly erred in confirming the action of the AO of levying the penalty u/s 271(1)(c) of the Act.”

Briefly stated relevant facts of the case are that the assessee is an individual reported the income from salary and income from other sources. Assesssee filed the return of income originally on 31.7.2009. Subsequently, it was revised and the income was reduced. During the proceedings, there was AIR information in possession of the AO. Assessee filed a revised computation of income at this point of time on 9.12.2011 incorporating the interest income earned from the Income Tax Department by way of Income Tax Refund that accrued to him u/s 244 of the Act. In addition, assessee also offered commission income of Rs. 8.5 lakhs (rounded of). The Assessing Officer assessed the income from the revised computation of income (supra). The matter has reached finality on this issue on merits. However, the Assessing Officer levied penalty amounting to Rs. 2,98,840/- u/s 271(1)(c) of the Act in respect of the above referred commission receipts officered by the assessee in the revised computation of income. This is the subject matter of dispute before the Tribunal.

Before me, Ld Counsel for the assessee submitted that no penalty should be levied on this income considering the fact that the said commission income suffered TDS while making payment to the assessee. He also submitted that the assessee has not claimed the said TDS in furnishing the return of income. Further, he mentioned that there is some virus that affected the accounts of the assessee leading to the exclusion of the entry relating to the commission receipt. Considering these aspects, Ld Counsel for the assessee prayed for deletion of the penalty.

After hearing both the parties, I find, the above explanation given by the asssessee is a bona fide one. Further, I find, how any assessee resort to concealment of exempt income when the TDS was already done and there is a reporting machinery about the said TDS to the Government in general and Income Tax Department in particular. As such, there is no incriminating material in possession of the AO for clinching the attitude of the assessee in concealing the exempt income. In my opinion, this is not the case where the TDS effected by the buyer company and did not remit the same to the Government account. Therefore, considering the above, I am of the opinion this is not a fit case for levy of penalty. I order accordingly.

In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 30th June, 2016. Sd/- (D. KARUNAKARA RAO) ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 30.6.2016 व.नन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : 1. अऩीराथी / The Appellant