2015 (6) TMI 386 - AT - Income Tax

Penalty under section 271(1)(c) - inaccurate particulars of income in respect of on money received from each member for booking 108 flats - Held that - No inaccuracy in the particulars of income of ₹ 7.80 crores being on money could be established by the Assessing Officer by bringing on record any relevant material. The amount of income and the nature of income as disclosed by the assessee was accepted by the Assessing Officer on assessment. Thus no inaccuracy or falsity in the particulars furnished by the assessee was found by the Assessing Officer. The case of the Assessing Officer is that further more details in respect of the income which was desired by the Assessing Officer could not be furnished by the assessee and therefore for this failure of the assessee he levied penalty under section 271(1)(c) of the Act. In our considered view for such a failure penalty under section 271(1)(c) cannot be levied. Penalty under section 271(1)(c) can be levied only for either concealment of income or for furnishing inaccurate particulars of income. Therefore, the Commissioner of Income-tax (Appeals) was not justified in confirming above levy of penalty. Further explanation 4 to section 271(1)(c) explains the procedure to calculate the quantum of tax sought to be evaded and therefore, in a case where returned income and assessed income are same, no penalty under section 271(1)(c) can be levied with the help of provisions of explanation 4 to section 271(1)(c) of the Act. - Decided in favour of assessee.

Issues Involved:
Levy of penalty under section 271(1)(c) of the Income Tax Act based on inaccurate particulars of income disclosure.

Analysis:
1. The appeal was filed against the order upholding the penalty under section 271(1)(c) of the Income Tax Act.
2. A search action revealed undisclosed income related to 'on money' received for a project, leading to penalty proceedings.
3. The Assessing Officer (AO) observed concealment of income by not providing accurate details, justifying the penalty.
4. The CIT(A) affirmed the AO's decision, emphasizing the duty to declare true income in tax returns.
5. Judicial precedents supported penalty even if income was surrendered later, emphasizing accurate record-keeping.
6. The appellant argued no concealment as the disclosed income matched the assessed income, challenging the penalty.
7. Citing a Delhi High Court case, the appellant argued against penalty without clear concealment in the return.
8. The appellant's arguments were countered by the Department's reliance on the CIT(A)'s order.
9. The tribunal reviewed lower authorities' orders and relevant facts, focusing on the inaccurate income particulars.
10. No disparity between disclosed and assessed income was found, challenging the basis for penalty imposition.
11. The AO penalized for incomplete information on 'on money' recipients, leading to the penalty confirmation by CIT(A).
12. The penalty was imposed under section 271(1)(c), not section 271 AAA, as clarified in the case.
13. The tribunal found no established inaccuracy in the disclosed 'on money' income.
14. The AO accepted the disclosed income without proving inaccuracies, questioning the penalty imposition.
15. Failure to provide additional details did not warrant penalty under section 271(1)(c) without concealment or inaccuracy.
16. Explanation 4 clarified penalty calculation, highlighting the necessity for concealment or inaccurate particulars.
17. Referring to a Gujarat High Court case, the tribunal emphasized the importance of accurate return assessment for penalty imposition.
18. Ultimately, the tribunal allowed the appeal, citing the incorrect application of penalty provisions.

Conclusion:
The judgment highlighted the importance of accurate income disclosure and the strict interpretation of penalty provisions under section 271(1)(c) of the Income Tax Act. It emphasized the need for clear concealment or inaccuracies in income particulars to justify penalty imposition, ultimately leading to the appeal's success based on the lack of established inaccuracies in the disclosed income.

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