2013 (9) TMI 1052 - AT - Income Tax

Penalty u/s 271(1)(c) - Held that - The addition in the hands of the assessee was made on two accounts i.e. (i) because of non declaration of receipts by the assessee and; (ii) estimation of profits in the hands of the assessee. As far as the issue of estimation of profits in the hands of the assessee is concerned we are of the view that there is no merit in the levy of penalty under section 271 (1) (c) of the Act as it is the case of two views and because of the divergence of view estimation of profits in the hands of the assessee. Accordingly we uphold the order of the CIT(Appeals) in this regard and confirm the deletion of penalty on estimation of profits in the hands of the assessee. The grounds of appeal raised by the revenue are dismissed. Addition on which penalty under section 271 (1) (c) was levied was under declaration of the receipts by the assessee. The assessee had declared contract receipts from the civil work undertaken by the assessee. However receipts totaling 21, 54, 387/- were not declared and some part was declared in the security account by the assessee but were not declared as part of the receipts from PWD Sirhind. When information was called from the PWD Sirhind the Assessing Officer found the assessee to have suppressed its contract receipts on which tax was also deducted at source by the said concern. The case of the assessee however was that it had not received the said TDS certificates from the said department and hence the confusion and under-declaration of the receipts by the assessee. We find no merit in the stand of the assessee in this regard and it is a fit case of levy of penalty for furnishing inaccurate particulars of income

Summary

Issues:
Penalty under section 271(1)(c) of the Income-tax Act, 1961 - Concealment of income and furnishing inaccurate particulars.

Detailed Analysis:

Issue 1: Penalty Levied on Estimation of Net Profit
The revenue appealed against the deletion of penalty by the CIT(A) on the addition made for estimation of net profit. The CIT(A) upheld the penalty, citing the assessee's conduct reflecting concealment. The penalty was levied based on the total assessed income. The Tribunal considered the pre-conditions for penalty under section 271(1)(c) and various judicial interpretations of 'concealment' and 'inaccurate particulars'. The Tribunal found no merit in the levy of penalty on estimation of profits, as it was a case of divergence of views. The order of CIT(A) deleting the penalty on estimation of profits was upheld, and the revenue's appeal was dismissed.

Issue 2: Penalty for Suppression of Receipts
The assessee appealed against the penalty upheld by the CIT(A) for the addition in income due to under-declaration of receipts. The assessee claimed confusion due to non-receipt of TDS certificates, leading to the under-declaration. The Tribunal found no merit in the assessee's stand and upheld the penalty for furnishing inaccurate particulars of income. The penalty on suppressed receipts was confirmed, and the assessee's appeal was dismissed.

Judicial Interpretations and Precedents
The Tribunal referred to the Supreme Court's interpretation of 'particulars' in inaccurate particulars of income. It highlighted that a mere claim not accepted by the revenue does not attract penalty under section 271(1)(c). The Punjab & Haryana High Court's rulings emphasized that a wrong claim does not amount to concealment or inaccurate particulars. The Tribunal considered the bonafide nature of the claim and upheld the deletion of penalty on estimation of profits. The focus was on deliberate default rather than mere mistakes for penalty imposition.

Conclusion
The Tribunal dismissed both the appeals of the assessee and revenue, confirming the penalty on suppressed receipts while deleting the penalty on estimation of profits. The judgment highlighted the importance of bonafide claims and deliberate default for penalty imposition under section 271(1)(c) of the Income-tax Act, 1961.