Penalty Imposed u/s 271(1)(c) of Income Tax Act on Ground of Concealment of Income in ROI: ITAT Deletes Penalty [Read Order]

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) deleted the penalty imposed by the assessing officer under section 271(1)(c) of the Income Tax Act,1961 on the ground of concealment of income in return of income (ROI). 

Hardik Mahendrabhai Patel, the appellant assessee was a proprietor of First Care Corporation and engaged in the business of providing Manpower Supply Services and also derives income from remuneration from Ask Me LAB Con Services Pvt. Ltd. 

The assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for confirming the imposition of penalty by the assessing officer under section 271(1)(c) of the Income Tax Act. 

During the hearing of the appeal, none appeared for the assessee and Purushottam Kumar appeared on behalf of the revenue department. 

The written submission was submitted by the assessee and submitted that the penalty in respect of disallowance under Section 40A(3) of the Income Tax Act, for Vehicle Expenses cannot be said as concealment of income as it genuinely claimed the vehicle expenses. 

It was also submitted that the penalty in respect of disallowance under Section 40A(3) of the Income Tax Act for cash payment for the purchase of Gold Ornament genuinely claimed the said expenditure and, therefore, it cannot be treated as concealment of income or furnishing of inaccurate particulars of income. 

The counsel for the revenue department relied on the decisions made by the lower authorities and contended that the assessee filed the return of income in which inaccurate particulars of income were shown and conceal the income which was derived from the vehicle expenses and gold purchases which were considered as the concealment of income and imposed penalty under section 271(1)(c) of the Income Tax Act. 

A single-member bench comprising Suchitra Kamble (Judicial) held that the penalty imposed by the assessing officer for the concealment of income or inaccurate particulars of income under section 271(1)(c) of the Income Tax Act was not as per the law and are liable to be deleted while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

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