penalty u/s 271(1)(c)

[Mansha]

Respected experts
On the basis of the information available with I T Dept. case of an assessee has been reopened and At the time of assessment proceedings some undisclosed income of an assessee has been found by AO  however against that Income, there were TDS. After an addition of undisclosed income, though returned income has been increase but after giving the credit of TDS untimately tax payable is NIL.
Now My query is :
Can penalty u/s. 271(1)(C)  be imposed? since tax sought to be evaded is NIL.

Thanks

[ashutosh majumdar]

Respected experts
On the basis of the information available with I T Dept. case of an assessee has been reopened and At the time of assessment proceedings some undisclosed income of an assessee has been found by AO  however against that Income, there were TDS. After an addition of undisclosed income, though returned income has been increase but after giving the credit of TDS untimately tax payable is NIL.
Now My query is :
Can penalty u/s. 271(1)(C)  be imposed? since tax sought to be evaded is NIL.

Thanks

Good question. But if there was "TDS" would it still qualify as "concealed income" or is it just a case of omission to declare the income? Anyway, your point is that there is "concealment" of income but no "tax sought to be evaded".

Explanation 4 to section 271(1)(c) defines the expression "the amount of tax sought to be evaded" as follows:

   

"(a) in any case where the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished has the effect of reducing the loss declared in the return or converting that loss into income, means the tax that would have been chargeable on the income in respect of which particulars have been concealed or inaccurate particulars have been furnished had such income been the total income;

          (b)  in any case to which Explanation 3 applies, means the tax on the total income assessed as reduced by the amount of advance tax, tax deducted at source, tax collected at source and self-assessment tax paid before the issue of notice under section 148];

          (c)  in any other case, means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished."

"Tax on the total income assessed" would have to be taken into account after giving credit for the TDS. The result will be that there will be further tax payable and so no penalty payable.