Not disclosing salary was not concealment when TDS was also not claimed – ITAT

Not disclosing salary was not concealment when TDS also not claimed by the assessee. ITAT deleted penalty holding that there was a reasonable cause provided in Section 273B

ABCAUS Case Law Citation:
ABCAUS 2761 (2019) (01) ITAT

This assessee had challenged the order of the Commissioner of Income Tax (Appeals) in confirming the penalty levied by the Assessing Officer (AO) under Section 271(1)(c) of the Income-tax Act, 1961 (the Act).

The case of the Revenue was that during the year under consideration, the assessee had worked with two Information Technology companies as a salaried employees. However, the assessee, in the return of income admittedly disclosed only the salary income received from the later company and not disclosed the salary received from the first company.

The assessee explained before the Assessing Officer that he was not aware of provisions. However, the Assessing Officer found that the assessee concealed the income received and imposed the impugned penalty. On a query from Bench, the Revenue submitted that both the companies had deducted tax at source (TDS) at the time of making payment but the assessee had also not claimed the tax deducted by the first company.

The Tribunal opined that had the assessee claimed TDS made by the first company, then it can be said that the assessee had concealed part of income or furnished inaccurate particulars of income. According to the Tribunal, the very fact that the assessee had not claimed TDS made by the first company showed that there was a reasonable cause on the part of the assessee in not disclosing the salary received from the first company.

According to the Tribunal, since the TDS was deducted, the fact of salary received by the assessee was very much within the knowledge of the Department.

In view of the above, the Tribunal opined that there was reasonable cause on the part of the assessee as provided in Section 273B of the Act and hence, this was not a fit case for levy penalty under Section 271(1)(c) of the Act.

Accordingly, orders of both the authorities below were set aside and the penalty levied by the Assessing Officer was deleted

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