The Tax Publishers2012 TaxPub(DT) 0275 (Ahd-Trib) : (2012) 043 (II) ITCL 0212

INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)--ConcealmentIgnorance of amendment--assessing officer imposed penalty on account of disclosure of interest income earned on Foreign Currency Non-Resident (FCNR) FRDs in the return filed in response to notice issued under section 153A. Assessee argued that non-incorporation of the interest income in original return was a bona fide belief under ignorance of subsequent amendment in section 6(6) and consequently, interest income from FCNR deposits continued to be claimed as exempt under section 10(15)(iv)(fa). Besides, no tax was ever deducted by the banking authorities on such interest income. Even in original return bona fidely status was shown as resident but not ordinarily resident had not been found to be false. Subsequent to search proceedings, when he came to know about the correct legal position, that his status became R & OR and consequently, interest on FCNR deposits became liable to tax, the income was offered for tax and tax paid thereon suo motu. Held: Making of wrong claim under some bona fide belief is not at par with concealment or giving of inaccurate information, which may call for levy of penalty under section 271(1)(c).

Income Tax Act, 1961 Section 271(1)(c)

IN THE ITAT, AHMEDABAD BENCH 'A'

D. K. TYAGI, J.M. & A.N. PAHUJA, A.M.

Dy. CIT v. Ajay Kumarlal Tehalyani C/o Asian Food Industries

ITA No. 2295/Ahd/2009, ITA No. 2296/Ahd/2009

30 June 2011

Revenue by : M R Chaudhry, DR

Assessees by : D K Parikh, AR

ORDER

A.N Pahuja

These two appeals by the Revenue against two separate orders dated 13-1-2009 of the learned Commissioner (Appeals)-IV, Ahmedabad, for the assessment year 2005-06, raise the following common grounds :

(1) On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) has erred in deleting the penalty levied under section 271(1)(c) of Rs.5,63,200 on disclosure of interest income of Rs. 19,63,940 by Shri Ajay Kumarlal Tehalyani and Rs. 5,78,000 on disclosure of interest income of Rs.20,13,264 by Smt. Radhaben K Tehalyani, in the return filed in response to notice under section 153A, ignoring the fact that the said income was detected during the search under section 132 of the Income Tax Act, 1961 and it was not reflected in the original return of income filed under section 139(1), overlooking the ratio laid down by the Hon'ble Supreme Court in the case of Dharmendra Textile Processors (2008) 306 ITR 277 (SC) : 2008 TaxPub(DT) 2320 (SC) wherein it was laid down that penalty under section 271(1)(c) was civil wrong & mens rea is not is not required to be established.

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