Penalty leviable when revised ITR is filed after issuance of notice
Relevant Extract of Order is as given below:
In the instant case, in the original return filed on 30.09.2011, the assessee has declared total income of Rs.9,773/-. The receipts were Rs. 22,10,715/- and expenses Rs.22,00,942/-, thus resulting in a net profit of Rs.9,773/-.As per the computation the tax comes to Rs. Nil.
The date of receipt of notice u/s 143(2) by the assessee which was issued by the AO was 12.9.2012.
The date of receipt of notice u/s 142(1) by the assessee which was issued by the AO was 15.9.2012.
However, in the revised return of income filed on 25.09.2012, the assessee has declared total income of Rs.25,22,599/-. The receipts were Rs. 1,08,01,725/- and expenses Rs.82,79,126/-, thus resulting in a net profit of Rs.25,22,599/-The tax payable on it as per the assessee comes to Rs.5,88,931/-.
Not claiming credit for tax deducted at source in the original return of income is not germane to the present issue.
Section 143(2) states that where a return has been furnished u/s 139, the AO, if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not under paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the AO or to produce, or cause to be produced before the AO any evidence on which the assessee may rely in support of the return.
For the purpose of making assessment, the AO may serve on any person a notice u/s 142(1) to produce or cause to be produced, such accounts or documents as the AO may require.
Thus in the instant case, the assessee had no intention to declare its true income in the original return of income filed on 30.09.2011. Had it been the intention of the assessee to make a full and true disclosure of its income, it would have filed a revised return of income before the issuance of the notice 143(2)/ 142(1) by the AO. Therefore, in the instant case, the AO has rightly held that the assessee has deliberately and consciously failed to furnish full and true particulars of income and attempted to conceal income. To hold otherwise would be to exalt artifice over reality and to deprive the statutory provisions in question all serious purpose.
However, the penalty is not levyable on the disallowance of Rs. 49,791/- (disallowance u/s 14A) and Rs. 5,00,000/- (salary).
The AO is directed to restrict the levy of penalty u/s 271(1)(c) to 100% of the difference between revised income (Rs. 23, 92, 594/-) and original income (Rs.9,733/-).
8. In the result, the appeal is partly allowed.
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