The Income Tax Appellate Tribunal, Lucknow recently in the case of Pankaj Kumar Gupta v. Income Tax Officer ruled that penalty is not leviable when the assessee co-operated in re-opening proceedings and paid tax.
The bench including T.S. Kapoor, (AM) and Partha Sarathi Chaudhury, (JM) was held so while hearing the assessee’s appeal from the order of the CIT (A).
In instant case, the sole issue was against the imposition and confirmation of penalty of Rs.70,768/- levied under section 271(1)(c) of the Act.
The AO levied penalty on the assessee observing that the assessee had undisclosed income on the sale of property and paid tax only when the notice under section 148 was served.
So the AO had an opinion that if the assessee hasn’t ignorant about the sale and not issued notice under section 148 of the Act, then the assessee would not have paid taxes on capital gain and thus penalty under section 271(1)(c) of the Act was imposed.
Assessee carried the matter before the CIT (A) and filed various decisions of tribunal identical to his issue and also submitted that assessee was unknowingly not included the tax on sale of property but when he came to know about the tax to be paid, the very day when the assessment order was passed he paid taxes as is evidence on record.
But AO confirmed the order of AO and levied the penalty. Further aggrieved assessee preferred the matter before ITAT.
The Tribunal bench observed that upon serving of notice under section 148 of the Act, the assessee was eager to know the mistake he had committed on coming to know about the amount of tax payable, has immediately paid tax on the same date on the omitted transaction. But the penalty 271(1)(c) of the Act says “concealment of income or furnishing of inaccurate particulars of income”.
Accordingly, the tribunal ordered that no penalty since the matter concerned by the assessee has no intention to conceal the income or furnish inaccurate particulars of income.
