Whether penalty is leviable if the income offered to tax during the assessment proceeding post survey?
A recent Mumbai Tribunal decision emphasized the importance of demonstrating genuine intent in correcting errors in tax returns. In its decision, the Mumbai Tribunal provided a reassuring ruling. It stated that if an assessee files a revised return of income during the assessment proceeding so as to correct errors in the original return, and the revised return is accepted by the Assessing Officer (AO) after the AO raises queries about certain undisclosed incomes, then no penalty can be levied.
This was because the assessee demonstrated given the facts of the case that there was no intention to conceal the income.
The crux of this ruling lies in the demonstration of intent. Therefore, it is crucial to highlight the genuine intent behind the actions, as it is a key factor in mitigating penalties.
Instances where income was unintentionally omitted from tax filings and later disclosed during the assessment should not attract penalty provisions, provided the taxpayer can validate their genuine intent. It’s never too late to disclose your income. Remember, the sooner you do it, the better it is for you and your tax liabilities.
The copy of the order is as under:
