13 December 2012
Failure to declare interest on accrual basis on Kisan Vikas Patra in IT Return for first 4 years due to ignorance but including interest thereafter on accrual basis.What happens if previous omission gets detected?Is it proper to include total interest earned in the year of maturity in computation of income if not done earlier and pay tax thereon. Kindly reply.
14 December 2012
It is recommended to include Total interest of first four years in the year of maturity.
That shall help you to save yourself/ client from penalty u/s 271(1)(c) on the ground that ommission was not purposeful.
I represented the case in ITAT Tribunal in one of my clients case and he was saved from Penalty of around Rs 1,00,000/- on the ground that though he has violated Circular 687 which says that income from KVP should be calculated on Accrual basis however as he has paid it on Cash basis, so he has not Concealed his income and hence no penalty is leviable.
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