Penalty Levy u/s 271(1)(c): ITAT Dismisses Appeal as Withdrawn Under Vivad Se Vishwas Scheme [Read Order]

The Kolkata Bench of Income Tax Appellate Tribunal(ITAT) dismissed the appeal of the assessee regarding the penalty levy under Section 271(1)(c) of Income Tax Act,1961 for Assessment Year 2013-14, as withdrawn under the Vivad se Vishwas Scheme.

Raj Kumar Agarwal HUF,appellant-assessee, appealed against the 09.05.2024 order of the Commissioner of Income Tax(Appeals)[CIT(A)], which upheld a penalty under Section 271(1)(c) for AY 2013-14. The assessee challenged the ₹14,48,660 penalty under Section 271(1)(c), arguing it was unjustified as all facts were disclosed, the explanation was bona fide, and the additional income was voluntarily disclosed before receiving reasons for reopening the assessment.

Law and Procedure for Filing of Appeals

Section 271(1)(c) of the Act allows the tax authorities to impose a penalty if a taxpayer conceals income or provides incorrect information in their return. The penalty can range from 100% to 300% of the tax that was evaded or underreported. However, the taxpayer can challenge the penalty if they can prove there was no intention to conceal income or provide false information.

The assessee's counsel stated that the assessee had opted for the Vivad se Vishwas, 2024 scheme and requested to withdraw the appeal, which the department did not oppose.

The two member bench comprising Pradip Kumar Choubey(Judicial Member) and Rakesh Mishra(Accountant Member) noted that under Section 91(2) of the Vivad se Vishwas Scheme, 2024, appeals are considered withdrawn once a declaration is filed and a certificate is issued by the Designated Authority. Section 91(3) also required the taxpayer to withdraw appeals and provide proof of payment under Section 92(2).

Since the assessee requested to withdraw the appeal, the tribunal allowed the withdrawal, and the appeal was dismissed. The tribunal also mentioned that if necessary, the assessee could file a Miscellaneous Application to restore the appeal.

In short,the appeal filed by the assessee was dismissed as withdrawn.

To Read the full text of the Order CLICK HERE

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