Concealment penalty deleted for excess salary appearing in Form 26AS on revision by employer. ITAT accepted assessee’s explanation as bonafide & genuine
ABCAUS Case Law Citation:
ABCAUS 3160 (2019) (09) ITAT
Concealment penalty for excess salary appearing in Form 26AS
In the instant case, the appeal was filed by assessee against the order passed by Commissioner of Income Tax (appeals)for confirmation of penalty order passed by the Assessing Officer (AO) u/s 271(1)(c) of the Income-tax Act, 1961 (the Act).
The assessee filed its return of income showing income of Rs. 15,00,000/- from salary from the employer company on which income-tax was deducted at source u/s 192 of the 1961 Act of Rs. 3,00,000/- which was claimed in the aforesaid return of income filed by the assessee.
The said employer had also issued Form No. 16 declaring that salary of Rs. 15,00,000/- was paid to the assessee and income-tax was deducted at source on the said salary of Rs. 3,00,000/-.
The assessee based on aforesaid Form No. 16 filed return of income with Revenue. The said employer had also filed Statement of income-tax deducted at source on salaries in Form No. 24Q wherein assessee salaries were shown to be Rs.15,00,000/- and income-tax was deducted at source to be Rs. 3,00,000/- on behalf of the employer.
However, later a revised certificate in Form No. 16 was issued by said employer stating that total salary income of the assessee to be Rs. 31,63,897/- including additional salary income of Rs. 16,63,897/- and total income-tax deducted at source was Rs. 8,00,000/- u/s 192 of the Act on behalf of the assessee.
The said employer also revised its statement of TDS in form no. 24Q showing the revised salary of Rs. 31,63,897/- and total TDS of Rs. 8,00,000/- deducted on behalf of the assessee u/s 192 of the Act.
Thereafter, the said salary of Rs. 31,63,897/- was reflected in Form No. 26AS.
The assessee filed a revised computation before being asked by the AO during the course of assessment proceedings conducted by the AO and declared the said additional salary income and additional TDS. The
AO completed assessment proceedings vide assessment order passed u/s 143(3) of the Act., wherein he made addition towards aforesaid additional salary which stood accepted by the assessee as it was voluntarily disclosed by assessee during assessment proceedings conducted by the AO u/s 143(3) read with Section 143(2) albeit the said disclosure was made after issuing of notice u/s. 143(2) and 142(1) of the Act by the AO.
The AO did not consider the declaration of the assessee as bonafide and penalty u/s 271(1)(c) of the 1961 Act was levied by him against assessee as at the time of filing of return of income, the assessee was having details of additional salary and TDS as well the assessee was in possession of new TDS certificate in form no. 16. The said additional salary as well additional TDS was duly reflected in Form no. 26AS by the time assessee filed its return of income.
The Tribunal noted that the assessee had filed the return based on Form 16 issued by the employer. However, later a revised certificate in Form No. 16 was issued by said employer stating that total salary income of the assessee was Rs. 31,63,897/- including additional salary of Rs. 16,63,897/- and income-tax deducted at source of Rs. 8,00,000/- u/s 192 of the Act. The employer also filed statement of TDS in form no. 24Q.
The Tribunal observed that before the AO during the course of assessment proceedings the assessee declared the additional salary income and TDS thereon.
The Tribunal opined that the explanation offered by assessee wass bonafide to take it out of clutches of the penalty proceedings as no attempt was made by assessee to furnish inaccurate particulars of income nor an attempt is made by assessee to conceal his income more-so there is no prejudice to the Revenue as further income-tax of Rs. 5,00,000/- was deducted at source by employer u/s 192 on behalf of assessee on additional salary income paid to assessee.
The Tribunal further pointed out that the employer duly filed revised statement of income-tax deducted at source u/s 192 of the Act in quarterly returns filed with Revenue in Form No. 24Q wherein all the information pertaining to additional salary and additional TDS stood disclosed to Revenue. The assessee never made an attempt to claim entire TDS of Rs. 8,00,000 deducted by Pace while on the other hand declaring initial salary of Rs. 15,00,000/- rather it only claimed credit of TDS of Rs. 3,00,000/- in return of income filed with Revenue.
According to Tribunal, it showed bonafide of the assessee and it was a case of bonafide and genuine error on the part of the assessee while filing of its return of income in the month of March and once the said error came to notice of the assessee when assessment proceedings were started by the AO, it immediately filed revised computation of income declaring additional salary and additional TDS.
Thus, the Tribunal accepted explanation offered by assessee to be bonafide and genuine and accordingly ordered deletion of penalty of levied by the AO u/s 271(1)(c) of the Act
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