By C. N. Vaze
Shailesh Kamdar
Jagdish T. Punja bi
Bhadresh Doshi Chartered Accountants
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Section 271(1)(c), read with section 22, of the Income-tax Act, 1961- No penalty can be imposed in a case where assesse suo motu revises his return declaring additional income and has paid taxes thereon before any detection of concealment by revenue authorities.
FACTS
The assessee filed his return declaring certain rental income. Subsequently, the assessee suo moto revised its return wherein he included certain additional amount of rental income.
Since original return was not filed u/s. 139(1) within prescribed time, the Assessing Officer opined that return filed subsequently could not be treated as revised return. The Assessing officer thus completed assessment u/s. 143(3). He also passed a penalty order u/s. 271(1)(c) for concealment of particulars relating to rental income.
The Commissioner (Appeals) confirmed penalty order.
On second appeal:
HELD
The Tribunal observed that in the instant case the assessee had offered additional rental income and paid the taxes thereon before any detection of concealment by the revenue authorities. No notice or query was raised regarding the rental income offered by the assessee for taxation. Therefore, it cannot be said that the assessee either concealed the income or furnished the inaccurate particulars of income. In this case, the rental income inadvertently omitted in the original return was voluntarily offered for taxation during the course of assessment proceedings. The assessee submitted that during the course of assessment proceedings, the assessee realized its mistake and pointed out the same to the Assessing Officer.
There was no detection of concealed income by the revenue authorities. The assessee voluntarily offered the rental income for taxation and the same was accepted by the Assessing Officer in the assessment order passed u/s. 143(3) of the Act. Considering the entire facts and circumstances of the present case, it was held that no penalty u/s. 271(1)(c) can be validly levied. Therefore, the penalty levied by the Assessing Officer and confirmed by the Commissioner (Appeals) is cancelled.
