Income Tax Penalty cannot be levied on Voluntarily Surrendered Income during Survey: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Pune bench has held that the income tax penalty under section 271(1)(c) of the Income Tax Act, 1961 cannot be levied on assessee since he surrendered the undisclosed income during survey.

The department found that the reported income and the assessed income of the assessee remain same except for minor disallowance of expenses. The AO has imposed penalty only with reference to the amount of Rs.50.00 lakh and odd which was suo motu declared by the assessee in the return.

A bench of Shri R.S. Syal, Vice President and Shri Partha Sarathi Chaudhury, Judicial Member has observed that “on going through the mandate of the Explanation, it becomes overt that the penalty is leviable in respect of the amount of income added or disallowed in the computation of total income. A particular income can be added only when it is not offered in the return of income. If it is offered in the return of income, then that cannot be said to be added by the AO for the purposes of Explanation 1 to section 271(1).”

“In view of the fact that the assessee voluntarily offered the income, declared in the survey, in the return of income and the assessment was made without making any addition on that score, we hold that such an income cannot constitute the bedrock for the imposition of penalty u/s.271(1)(c) of the Act. We, therefore, order to delete the penalty,” the Tribunal said.

The assessee was represented by Shri Pramod Shingte.

To Read the full text of the Order CLICK HERE

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