Filing of Revised Return and Payment of Tax After Receiving Re-Assessment Notice shows “No Willful Attempt to Escape Income”: ITAT deletes Penalty [Read Order]

The Ahmedabad Income Tax Appellate Tribunal ( ITAT ) while deleting the penalty imposed by the assessing officer held that filing of revised return and payment of tax after receiving reassessment notice showed that no willful attempt to escape income.

Assessee Pankajkumar Babulal Tiwari, is an individual and employed with Torrent Power Ltd. In the return filed by the assessee declared income at Rs. 22, 81,620/- under the head salary and other income. Further  it is found that assessee during the year earned net income of Rs. 4,43,932/ from account of premature surrender of life Insurance corporation. Which  was not offered to tax by the assessee. Therefore, the assessment was re-opened by issuing notice .The assessee in response to such notice filed a return of income .Even though the assessing officer initiated penalty proceedings on account of concealment of income. Against this order assesee filed an appeal before the ITAT.

 Anujkumar Tiwari, counsel for the assessee contended that income from LIC was not offered to tax under the bona-fide belief by the assessee. The amount of tax was paid much before the issuance of notice under section 148 of the Income Tax Act 1961. Therefore the penalty could not be levied.

Sanjaykumar counsel for revenue contented that assessee offered the undisclosed income only when it was brought to his notice by the department. Thus, the assessing officer held that the assessee deliberately concealed the particulars of income until the same was detected by the department.

After considering the contentions of the both parties the single bench of the ITAT Waseem Ahmed, (Accountant Member) allowed the appeal filed by the assessee and further observed that “assessee under the bona fide belief not offered income on receipt from LIC in original return however rectified the same while filing the return under section 148 of the Act. The assessee also paid due tax on such receipt even before issuance of notice under section 148 of the Act. Thus, there was no willful attempt of the assessee to conceal his income”.

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