In Virtual mode, the Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has held that penalty is not demandable for bonafide mistakes in income tax returns filed without the assistance of a tax consultant.
Altaf Hussain Laskar, the assessee argued that the CIT(Appeals) has erred in confirming the penalty of Rs.2,00,000/-, which was imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act.
The assessee at the relevant time was working as an Executive of ONGChas filed his return of income on 03.08.2016 disclosing a total income of Rs.21,88,960/-. This return was revised on 21.01.2018 showing a total income of Rs.16,60,500/-.
The Assessing Officer has passed the assessment order, whereby he determined the taxable income of Rs.21,95,079/- and has observed that originally the assessee has returned salary income at Rs.19,99,880/-. In the revised return, he has reduced the original salary income.
The assessee had received a sum of Rs.3,00,056/-treated this amount as LIC receipt received on maturity of the policy. The Assessing Officer viewed that it was part of his salary because it is available in Form No. 16A issued by ONGC. The Assessing Officer has made the addition of both amounts and confirmed the penalty under section 271(1)(c) of the Income Tax Act for concealment of particulars of income.
It was observed that the assessee has committed certain mistakes in computing the income originally, whereby certain exempt income was included as taxable and certain perquisites were claimed as exempt in the revised return. Later on, it excluded this in the revised return but simultaneously erred in excluding the value of the perquisite also. As far as LIC maturity amount is concerned, i.e. not taxable.
A Coram comprising of Shri Rajpal Yadav, Vice-President &Dr Manish Borad, Accountant Member observed that the assessee might have not filed the return with the assistance of the Tax Consultant. Later he explained his position and corrected the figure before completing of the assessment proceedings.
While allowing the appeal, the Tribunal held that the assessee can’t be penalized and deleted the penalty.
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