Income Tax Appellate Tribunal

DCIT, Central Circle vs. KGN Industries Ltd.

MANU/IB/0589/2022

07.09.2022

Direct Taxation

When assessee has wilfully and deliberately concealed income by not filing the Return of Income, assessee is liable for penalty

The present appeal has been filed by the Revenue against the order passed by the Commissioner of Income Tax (Appeals), Ahmedabad quashing the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961

It is seen from record, the original assessment order was passed is a best judgment assessment passed under Section 144 read with 147 of the Act. During the penalty proceedings also, the assessee has not participated in the hearings. The assessee being a Public Ltd. Company and having not filed the Return of Income for the assessment year 2010-11 and also not responded to notice in spite of repeated opportunities. Therefore, the Assessing Officer treated the entire income as concealed income and levied minimum penalty of Rs. 57,13,930 within the meaning of Section 271(1)(c) read with Explanation 1 of the Act.

The A.O. has clearly mentioned that, penalty proceedings for concealment of income initiated by way of issue of notice 274 read with Section 271(1)(c) of the Act. Similarly in penalty order, the assessing officer held that, the assessee has wilfully and deliberately concealed income by not filing the Return of Income. Therefore, the assessee is liable for penalty under Section 271(1)(c) read with Explanation 1 of the Act.

It is further noted in the assessment order that the assessing officer also initiated penalty proceedings under 271F of the Act as well as under Section 271B of the Act for not getting the books audited. Thus, the conclusion arrived by the Learned CIT(A) is legally not correct and the same is set aside and the penalty order passed under Section 271(1)(c) by the Assessing Officer is restored. Appeal allowed.

Tags : Penalty Deletion Legality

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