Liability of representative assessee for penalty u/s 161

Chartered Accountant

Assessment for the Assessment Year 2011-12 has been completed under Section 143(3) of the Act wherein the Assessee has been treated as "Representative Assessee" for the Income of Capital Gain arising on account of one Sale transaction of a Residential Plot which was sold through the Assessee for and on behalf of his Daughter who is a NRI. However, the Assessee did not disclosed this transaction in his ITR and during the Assessment Proceedings, the assessee disclosed all the material facts for this Sale transaction.

The Assessing Officer treated the assessee as "Representative Assessee" under Section 160 of the Act for the Capital Gain Income and levied Tax @ 20% with Interest under Section 234B. Also, Notice for Penalty under Section 271(1)(c) of the Act has also been issued.

The Returned Income of the assessee has been accepted as it is without any further addition to it. The only addition made by the AO is the Capital Gain Income which is explained above.

QUESTION

  1. Whether Interest can be levied and charged from the "Representative Assessee" in view of the provisions of Section 161 of the Act.
  2. Whether Penalty under Section 271(1)(c) of the Act can be imposed on the "Representative Assessee" in view of the Section 161 of the Act.

NOTE

  1. As per Section 161 of the Act, only Tax can be levied upon and there is no provision for charging any Interest or Imposing any Penalty.
  2. As per Section 2(43) of the Act, Tax does not include Interest.
  3. As per Section 162 of the Act, the right of the "Representative Assessee" is to collect the Tax only and no where it speaks for Interest or Penalty.
  4. Since the Returned Income of the Assessee has been accepted without any further addition there to except the Capital Gain for which the assessee has been treated as "Representative Assessee" , there is no scope of imposing any Penalty on the assessee.
  5. As per plain reading of Section 271(1)(c) of the Act, the assessee has not concealed his Income and also has not filed inaccurate particulars of his income.

I could not get the Case Law on this matter and it is requested to kindly provide the same and guide as to how to proceed in this matter.

Thanks

 
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