2015 (11) TMI 799 - HC - Income Tax

Penalty under Section 271(1)(c) - Held that - There was no concealment of income or furnishing of inaccurate particulars of income by the assessee. From the record, it is clear, that the assessee had furnished all the particulars, but merely because the accounting method adopted by the assessee was not accepted, because of which certain tax had been levied, would not mean that the assessee had furnished wrong information or concealed any income while filing its return. As such, on merits as well as on the question of validity of the notice, we do not find any infirmity with the order of the Tribunal. - Decided in favour of assessee.

Summary

Issues:
- Appeal against Tribunal's order dismissing Revenue's appeal and holding penalty under Section 271(1)(c) not leviable.
- Validity of notice issued under Section 271(1)(c) of the Income Tax Act.
- Merits of the case regarding concealment of income or furnishing inaccurate particulars.

Analysis:
1. The High Court heard the appeal filed by the Revenue against the Tribunal's order dismissing the appeal and holding the penalty under Section 271(1)(c) not leviable. The original assessment proceedings saw the Assessing Officer re-determine the loss declared by the assessee, leading to penalty proceedings initiated under Section 271(1)(c) of the Act. The Commissioner of Income Tax (Appeals) allowed the assessee's appeal on the grounds of no concealment of income or false deduction. The Tribunal affirmed this finding, prompting the Revenue's further appeal.

2. The High Court examined the validity of the notice issued under Section 271(1)(c) of the Act. The Tribunal found the notice invalid as it did not specify the default for which proceedings were initiated against the assessee. The Court agreed with this assessment, emphasizing the importance of clarity in such notices to enable the assessee to respond appropriately. Citing a previous judgment, the Court upheld the Tribunal's decision on the notice's validity.

3. On the merits of the case, both the Appellate Commissioner and the Tribunal found no concealment of income or furnishing of inaccurate particulars by the assessee. The High Court concurred with this finding after reviewing the orders of the Assessing Officer, Appellate Commissioner, and the Tribunal. The Court noted that the assessee had provided all necessary particulars, and the disagreement over the accounting method did not imply concealment or inaccurate reporting of income. Therefore, the Court found no legal question warranting its determination and dismissed the appeal.

4. In conclusion, the High Court upheld the Tribunal's decision, emphasizing the importance of clear notices in penalty proceedings and affirming the absence of concealment or inaccurate reporting of income by the assessee. The Court found no legal grounds for interference and dismissed the appeal accordingly.