2014 (5) TMI 351 - AT - Income Tax

Penalty u/s 271(1)(c) of the Act Concealment of income Difference between income declared u/s 153A and u/s 139(1) of the Act Held that - Relying upon CHIRAG HARMANBHAI PATEL Versus DEPUTY COMMISSIONOER OF INCOME TAX CIRCLE-1 2014 (1) TMI 441 - ITAT AHMEDABAD - there was no force in the contention of the assessee that the AO has not given any specific finding whether the penalty has been levied on the concealment of particulars of income or furnishing of inaccurate particulars of income - The AO has given a finding that assessee has committed a default u/s 271(1)(c) of the Act in concealing the particulars of its income Decided against Assessee.

Summary

Issues involved:
- Appeal against the order of the Commissioner of Income Tax (Appeals) for Assessment Years 2006-07, 2007-08, and 2008-09.
- Levy of penalty under section 271(1)(c) of the Income Tax Act.
- Allegations of concealing income or furnishing inaccurate particulars.
- Absence of specific charge regarding the nature of the penalty.
- Judicial review of penalty imposition.

Analysis:

Issue 1: Levy of penalty under section 271(1)(c) for AY 2006-07
The Assessee appealed the order of the Commissioner of Income Tax (Appeals) confirming the penalty imposed by the Assessing Officer for concealing income. The Assessee argued that the penalty was not justified as the income was disclosed in subsequent returns. However, the Assessing Officer found the Assessee concealed income, leading to the penalty imposition. The Assessee contended that the penalty order did not specify whether it was for concealing income or furnishing inaccurate particulars. The Tribunal upheld the penalty, stating that the Assessing Officer had clearly found concealment of income, dismissing the Assessee's arguments. The appeal for AY 2006-07 was dismissed.

Issue 2: Levy of penalty under section 271(1)(c) for AYs 2007-08 & 2008-09
The Assessee challenged the penalty imposed for additional income not originally disclosed in the returns. The Assessee failed to prove the omission was a genuine mistake. The Tribunal noted similarities with the AY 2006-07 case and upheld the penalty for AYs 2007-08 & 2008-09. The Assessee's argument of an unspecified charge for the penalty was rejected, and the appeals for both years were dismissed.

General Observations:
- The Tribunal consolidated the appeals due to common issues for convenience.
- The Assessee's appeals were dismissed for all three Assessment Years.
- The Tribunal emphasized the importance of specific findings in penalty orders.
- Legal representatives presented arguments citing relevant case laws.
- The Tribunal provided detailed reasoning for upholding the penalties based on concealment of income.
- The Assessee was given the liberty to modify the grounds of appeal.

This judgment highlights the significance of clear findings in penalty orders and the requirement to establish genuine mistakes to avoid penalties under section 271(1)(c) of the Income Tax Act.