No penalty if concealed income voluntary declared before revenue detects

 

If assessee voluntary declares additional income by revising his return suo-motto, before any detection of concealment by revenue authorities then AO shall not issue penalty order for the same income. No penalty if concealed income voluntary declared before revenue detects.

Case: Harpreet Singh vs. Income Tax Officer

 

Facts:

The assessee filed his return of income through e-filing. Income were categorised under the heads ‘income from house property’ and ‘income from other sources’.

 

Subsequently, the case was selected for scrutiny assessment through CASS. The AO issued the assessment order under section 143(3), wherein certain amount on account of un-disclosed house property income was added to the total income of the assessee after allowing deduction under section 24(a) of the Act.

 

Since original return was not filed under section 139(1) within prescribed time, it was opined that return filed subsequently could not be treated as revised return. On this the AO initiated the penalty proceedings under section 271(1)(c) of the Act.

 

Assessee filed an appeal wherein, the CIT (A) confirmed the penalty. Thus, higher appeal was made by the assessee.

 

Held:

It was noted that the assessee offered additional rental income and paid the taxes thereon before any detection of concealment by the revenue authorities. In addition, no notice or query was raised regarding the rental income offered by the assessee for taxation.

 

Therefore, it was clear that the assessee neither concealed the income nor furnished the inaccurate particulars of income. The assessee submitted that the rental income was inadvertently omitted in the original return and was voluntarily offered for taxation during the course of assessment proceedings.

 

It was concluded that the assessee voluntarily offered the rental income for taxation and the same was accepted by the Assessing Officer in the assessment order passed under section 143(3). Thus, there was no detection of concealed income by the revenue authorities.

 

Hence, No penalty if concealed income voluntary declared before revenue detects.

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