Friday, January 24, 2014

Where returned income filed under section 153A is accepted by the AO, there will be no concealment of income and, consequently, penalty u/s. 271(1)(c) cannot be imposed - Tri

  1. ITAT MUMBAI - Income Tax
    Penalty u/s 271(1)(c) - Held that:- As per section 271(1)(B) - When any amount is added or disallowed then only a direction would suffice for the levy of penalty u/s. 271(1)(c) of the Act - But in the instant case, in respect of the additional income neither any amount is added nor disallowed by the AO , whatever has been returned by the assessee is assessed to tax except an addition of Rs. 90,000/- which was subsequently deleted by the Ld. CIT(A) - Decided in favour of assessee.

    Penalty u/s 271(1)(c) for A.Y. 2000-01 to 2005-06 - Held that:- Following Prem Arora Vs DCIT - ITAT DELHI] - The concealment of income has to be seen with reference to additional income brought to tax over and above income returned by the assessee in response to notice issued u/s. 153A - For the purpose of imposition of penalty u/s. 271(1)(c) resulting as a result of search assessments made u/s. 153A, the original return of income filed u/s. 139 cannot be considered - in case of search initiated after 1.6.2003 a return of income is always filed on issue of notice u/s. 153A - The penalty u/s. 271(1)(c) is imposable when there is variation in assessed and return income. If there is no variation, there will be no concealment. When there is no concealment, question of levy of penalty u/s. 271(1)(c) will not arise. This is settled position of law - Where returned income filed under section 153A is accepted by the AO, there will be no concealment of income and, consequently, penalty u/s. 271(1)(c) cannot be imposed - Decided in favour of assessee.

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