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2014 (2) TMI 541 - HC - Income TaxConfirmation of penalty u/s 271(1)(c) of the Act Held that - There was no clear finding by the Assessing Officer whether the assessee is guilty of concealing the income and/or furnishing inaccurate particulars of the income - the requirements as provided u/s 271(1) (c) for imposing penalty are required to be complied with - while imposing the penalty under Section 271(1)(c) of the Act, two conditions are required to be satisfied i.e. , the assessee has concealed the particulars of his income and the assessee has furnished incorrect particulars of such income Relying upon CIT Vs. Manu Engineering Works 1978 (9) TMI 18 - GUJARAT High Court and New Sorathia Engineering Co. Versus Commissioner of Income-Tax 2006 (1) TMI 71 - GUJARAT High Court - the Assessing Officer is required to give clear finding whether the assessee is guilty of concealing the income and/or furnishing incorrect particulars of income thus, there was no reason to interfere in the order of the ITAT Decided against Revenue.
Issues:
Challenge to impugned order by Revenue regarding penalty under Section 271(1)(c) of the Income Tax Act, 1961. Analysis: The appellant Revenue challenged the order passed by the Income Tax Appellate Tribunal, which allowed the appeal by the assessee against the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961. The Revenue raised substantial questions of law regarding the bonafide nature of the assessee's explanation, the Tribunal's disregard of Section 271(B) of the Act, and the deletion of penalty based on a single disallowance in the assessment order. The Assessing Officer used the terms "inaccurate particulars of income/concealment of income," which were confirmed by the CIT(A). However, the Tribunal relied on previous court decisions to quash the penalty, emphasizing the need for a clear finding on whether the assessee concealed income or furnished inaccurate particulars. The Tribunal's decision was upheld, stating that the Assessing Officer failed to provide a definitive conclusion on the nature of the assessee's actions, leading to the dismissal of the appeal. The Tribunal's decision was based on the requirement for a clear finding of concealment or inaccurate particulars when imposing penalties under Section 271(1)(c) of the Act. The court referred to previous judgments emphasizing the necessity of a positive determination by the Assessing Officer regarding the assessee's actions. The court highlighted that the Tribunal's decision was in line with legal principles and that the Assessing Officer's failure to provide a clear finding warranted the dismissal of the appeal. The court also noted that the insertion of Section 271(1)(b) by the Finance Act, 2005 did not alter the conditions for imposing penalties under Section 271(1)(c), emphasizing the dual requirements of concealment and furnishing incorrect particulars. Ultimately, the court found no reason to interfere with the Tribunal's decision, leading to the dismissal of the appeal by the Revenue. In conclusion, the court upheld the Tribunal's decision to quash the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, based on the Assessing Officer's failure to provide a clear finding on whether the assessee concealed income or furnished inaccurate particulars. The court emphasized the necessity of a positive determination in such cases and dismissed the appeal by the Revenue, stating that no substantial question of law arose from the Tribunal's decision.
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