No s. 271(1)(c) penalty even if revised ROI filed after detection but before issue of s. 148 notice

Radheshyam Sarda vs. ACIT (ITAT Indore)

For AY 2005-06, the assessee filed a return in which he offered long-term capital gains on sale of shares. An inquiry pursuant to a survey u/s 133A was conducted. Because the assessee was unable to furnish the documents called for by the department, it filed a revised return on 22.5.2008 in which the LTCG was offered as normal income and tax was paid. The AO thereafter issued a s. 148 notice, completed the assessment on the basis of the revised ROI without any addition. The AO levied s. 271(1)(c) penalty on the ground that the revised ROI was filed after detection by the department. The assessee argued that as the revised ROI was filed prior to the issue of the s. 148 notice, penalty was not leviable. HELD by the Tribunal: