No Penalty u/s 271(1)(c) Income Tax Act shall levied if Bonafide Assessee revised and added Interest Income: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT) Delhi bench held that the penalty under Section 271(1)(c) of the Income Tax Act should not be levied if the assessee bonafide revised and added the interest income.

Assessee, Pramila Tarneja, filed the appeal against the order of Commissioner of Income Tax Appeal(CIT(A)) by challenging the Penalty imposed under Section 271(1)(c) of the Income Tax Act .

Assessee Pramila Tarneja, is 75 years of senior citizen and  is a doctor by profession She was commissioned in the Army Medical Corps and seconded to the Indian Navy in the year 1971. After serving in various Army and Naval Hospitals for nearly 32 years, she took premature retirement in 2022 when she was posted as Professor and head in the Department of Obstetrics & Gynecology at the Armed Forces Medical College at Pune and was holding the post of surgeon captain.

During the appeal proceedings before the bench, Gaurav Bansa, counsel for the assessee submitted that in response to notice under Section 148 of the Income Tax Act the assessee included the interest income in its return of income and also paid due taxes etc thereon as per requirement of law therefore the assessee cannot be alleged that she either concealed particulars of its income or has furnished inaccurate particulars of income pertaining to interest income.

R. Mohan Reddy, Counsel for the revenue,  submitted that assessee did not disclose interest income in a return of income and when the Assessing Officer initiated the reassessment proceedings then the assessee came forward and declared interest income in the revised return filed in response to notice under Section 148 of the  Income Tax Act, hence, the Assessing Officer was right in imposing penalty on the assessee under Section 271(1)(c) of the Income Tax Act for concealment of particulars of her income.

The tribunal observed that there was a bonafide reason due to which the assessee could not revise her return of income to include interest income came to her notice after filing of return under Section  139(1) of the Income Tax Act.

Further the bench found that when she was called to file return of income by way of notice under Section 148 of the Income Tax Act then the assessee filed returns of income including interest income and also paid due taxes etc thereon.

After considering  the facts submitted by both parties, the two member bench of Pradip Kumar Kedia (Accountant Member) and Chandra Mohan Garg (Judicial Member) directed AO to deleted the penalty imposed under Section 271(1)(c) of the Income Tax Act and held that the interest income declared in revised return does not amount to concealment of income.

Therefore the bench allowed the appeal filed by the assessee.

To Read the full text of the Order CLICK HERE

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