Case Number: ITA 5916/DEL/2019
Appellant: DCIT Circle 33(5), New Delhi
Respondent: Gunjan Kawatra, New Delhi
Assessment Year: 2015-16
Order Type: Final Tribunal Order
Date of Order: 2022-10-27
Pronounced On: 2022-10-27
Case Filed On: 2019-07-08
This appeal was filed by the assessee, Mrs. Gunjan Kawatra, challenging the order dated 21.05.2019 passed by the learned Commissioner of Income Tax (Appeals)-11, New Delhi, which confirmed the penalty of Rs. 1,66,504/- imposed under section 271(1)(c) of the Income-tax Act, 1961 (the Act) for the assessment year 2015-16.
The assessee, a resident individual, filed her return of income on 23.08.2015 declaring an income of Rs. 5,87,730/-. During the assessment proceedings, the Assessing Officer (AO) noticed that the assessee had earned income from interest on fixed deposits, on which tax was deducted, but had not offered this income to tax in her return of income.
The AO found that the interest income from fixed deposits amounting to Rs. 10,38,912/- was not included in the return of income. Upon being questioned, the assessee submitted a revised computation of income, including the interest income. Additionally, the AO noted that the interest income from savings bank accounts declared by the assessee was Rs. 1,31,250/- less than the actual interest earned. The assessee subsequently offered this amount as income.
The AO completed the assessment, determining the total income at Rs. 17,57,890/-. Since the assessee had not offered a part of the interest income in the return of income, the AO initiated penalty proceedings under section 271(1)(c) of the Act, alleging furnishing of inaccurate particulars of income. The assessee’s appeal against the penalty was dismissed by the learned Commissioner of Income Tax (Appeals), leading to the present appeal before the Tribunal.
The Tribunal considered rival submissions and perused the materials on record. It was evident that the penalty under section 271(1)(c) was imposed on the assessee for not offering interest income earned during the year on fixed deposits and savings bank accounts to tax in the return of income.
The assessee explained that the TDS figure and corresponding income for the second, third, and fourth quarters of the relevant financial year were made available on the 26AS site only in September 2017 by ICICI Bank. This explanation was supported by a certificate issued by the bank on 28th April 2018. The Tribunal found this explanation to be reasonable and believed that there was a reasonable cause in terms of section 274 of the Act for not offering the interest income to tax in the return of income.
The Tribunal observed that the departmental authorities failed to consider the explanation of the assessee in the proper perspective. It was also noted that the assessee had offered the entire interest income to tax, either in the return of income or during the assessment proceedings.
Given these facts, the Tribunal held that the assessee should not be penalized under section 271(1)(c) of the Act. Accordingly, the penalty imposed was deleted, and the impugned order of the learned Commissioner of Income Tax (Appeals) was set aside.
The Tribunal allowed the appeal filed by the assessee and deleted the penalty imposed by the AO for not offering interest income to tax.
Order: The appeal is allowed.
Pronounced on: 27th October 2022
Judicial Member: SaktiJit Dey
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Assistant Registrar, ITAT, New Delhi
DCIT Circle 33(5), New Delhi vs Gunjan Kawatra – Disallowance of Interest Income
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