Rakhi Parihar appealed to the ITAT against the penalty levied by the CIT(A) for the assessment year 2009-10, under section 271(1)(c) of the Income Tax Act. This case showcases the complexities of tax assessments and the recourse available to taxpayers.
The appeal was filed following a discrepancy between the gross receipts reported in Rakhi Parihar’s income tax return and those reflected in Form No.26AS, leading to a penalty by the tax authorities after an addition was made to her income.
The case was initially dismissed by the CIT(A) due to the assessee’s absence, prompting an appeal to the ITAT. Notably, the ITAT had previously deleted the quantum addition related to this penalty, influencing the current proceedings.
During the hearing, both parties presented their arguments through video conferencing. The Tribunal considered the earlier decision to delete the quantum addition, which was pivotal in determining that the penalty under section 271(1)(c) was no longer justifiable.
The ITAT set aside the lower authorities’ decisions and canceled the penalty, highlighting the critical role of judicial consistency and the need for accurate initial assessments. This decision underscores the protection afforded to taxpayers against unwarranted penalties.
The outcome of Rakhi Parihar vs. ITO represents a significant victory for the taxpayer, illustrating the importance of challenging incorrect tax assessments and penalties. It serves as a precedent for similar cases, reinforcing the need for diligent and fair tax administration.
Rakhi Parihar vs. ITO: Successful Challenge Against Penalty under Section 271(1)(c) for AY 2009-10
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