2019 (1) TMI 292 - AT - Income Tax

Penalty levied u/s. 271(1)(c) - non specification of charge - various disallowance made - proof of concealment of income or of furnishing inaccurate particulars of income - Held that - From explanation by the assessee, we find that the additions have been made by not accepting the claim of the assessee. There is no case of concealment of income or furnishing of inaccurate particulars of income. The mere fact that assessee has not filed appeal against the additions, cannot be taken for adverse inference that the levy of penalty is automatic. This view is duly supported by the decision of Hon ble Apex Court in the case of Reliance Petroproducts (P.) Ltd. 2010 (3) TMI 80 - SUPREME COURT - decided in favour of assessee.

Summary

Issues:
Penalty under section 271(1)(c) of the Income Tax Act, 1961 for concealment of income or furnishing inaccurate particulars of income.

Analysis:
1. The appeal was against the order of the Commissioner of Income Tax (Appeals) confirming the penalty levied under section 271(1)(c) of the Income Tax Act, 1961. The Assessing Officer found discrepancies in the income offered by the assessee, including short-offered income from house property and unallowable transport allowance claimed. The penalty was based on the concealed income amounting to ?23,88,568.

2. The assessee contended that there was no concealment of income or inaccurate particulars. Various explanations were provided for the additions made, such as travel allowance reimbursement, income from house property, management fees, cash deposits, capital introduction, and disallowance under section 43B. The assessee argued that all relevant details were disclosed in the return of income, and there was no intention to conceal income.

3. The Appellate Tribunal noted that the additions were made by not accepting the assessee's claims, but there was no evidence of deliberate concealment. Citing the decision in Reliance Petroproducts (P.) Ltd., the Tribunal emphasized that the mere acceptance of additions does not imply concealment. The Tribunal also highlighted the absence of a specific charge in the penalty notice, which rendered the penalty unsustainable.

4. The Tribunal held that the penalty was not justifiable on the merits of the case, aligning with the principles established in Reliance Petroproducts (P.) Ltd. The issue of non-specification of charges in the penalty notice was deemed of academic interest as the penalty was not sustainable based on the merits. The appeal by the assessee was allowed, overturning the penalty imposed.

5. In conclusion, the Tribunal ruled in favor of the assessee, emphasizing that the penalty under section 271(1)(c) was not applicable due to the lack of evidence supporting concealment or furnishing inaccurate particulars of income. The decision underscored the importance of proper specification of charges in penalty notices for the imposition of penalties.