Delet'n of penalty held justified as assessee paid demanded amt. to revenue, HC
Delet'n of penalty held justified as assessee paid demanded amt. to revenue, HC
After Search, assessee was issued notice u/s 158BC (of Income Tax Act, 1961), to file block return for undisclosed income. Assessee filed it at Rs. 7.36 Lakhs. As assessee failed in making full payment, AO imposed penalty. CIT(A) allowed assessee's appeal in part. ITAT deleted penalty. On appeal HC upheld it holding, assessee paid 60% of total demanded, made by revenue, whereas, later on assessee paid balance amt. in installments, which also included amt. of interest.-000409
Facts in Brief:
1. The search was carried out in case of the assessee under section 132 (of Income Tax Act, 1961). Pursuant thereto, the assessee was issued a notice under section 158BC (of Income Tax Act, 1961), requiring him to file block return in respect of undisclosed income.
2. The assessee filed the same, declaring total income for block period of Rs. 20.36 lakhs. However, the tax payable on the aforesaid income was worked out at Rs. 12.83 lakhs.
3. The assessee filed block return with proof of payment of tax, to the tune of Rs. 7.36 lakhs.
4. The Assessing Officer held that since assessee had failed in making full payment of tax, therefore penalty was impugned under section 158BFA(2) (of Income Tax Act, 1961).
5. The Commissioner (Appeals) allowed the appeal filed by the assessee in part.
6. However, the Tribunal deleted the penalty by holding that since, the assessee had paid tax of more than 60 per cent of the total demand by the revenue and balance demand was paid by the assessee in instalments with interest, no fact of concealment of income had been proved by the department. Thus, the assessee could not be penalised under section 158BFA(2) (of Income Tax Act, 1961).
On appeal, HC held as under:
7. Going through the provisions of section 158BFA (of Income Tax Act, 1961), it appears that the penalty, which is envisaged and which can be imposed, though, is different from the penalty under section 271(1)(c) (of Income Tax Act, 1961) under sub-section (2) of section 158BFA (of Income Tax Act, 1961) the requirements of section 271(1)(c) (of Income Tax Act, 1961) are not to be looked into. The Tribunal while dismissing the appeal of the revenue, held in favour of the assessee, by interpreting the provisions of section 158BFA (of Income Tax Act, 1961).
8. It is clear that in the present case, the assessee had paid an amount earlier, which was nearly 60 per cent of the total demand, made by the revenue, whereas, later on the assessee paid balance amount in instalments, which also included amount of the interest accrued, thereon. Therefore, the Tribunal was justified in allowing the appeal of the assessee.
Case Reference-Assistant Commissioner of Income-tax,CC-2, Baroda v. Natubhai M. Makwana
HIGH COURT OF GUJARAT
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