2022 (5) TMI 623 - AT - Income Tax

Levy of penalty u/s 271(1)(c) - whether for furnishing of inaccurate particulars of income or concealment of income? - deduction u/s 35(1)(ii) has been disallowed by the Assessing Officer after due inquiry from the person who has issued certificate u/s 35(1)(ii) of the Act and said inquiry was duly confronted to the assessee - HELD THAT - The contention of the Ld. counsel of the assessee that no inaccurate particulars has been filed by the assessee are rejected being devoid of merit. Accordingly, we do not find any error in the order of Ld. CIT(A) and uphold the penalty sustained. Appeal of assessee dismissed.

Summary

Issues:
Levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961 for assessment year 2013-14.

Analysis:
1. The appeal was filed against the order of the Ld. Commissioner of Income Tax (Appeals) regarding the penalty imposed u/s 271(1)(c) of the Act. The grounds raised by the assessee challenged the initiation of penalty proceedings, claiming no inaccurate particulars were furnished. The Assessing Officer disallowed a deduction claimed by the assessee for payment made to a specific institution, leading to the penalty imposition.

2. The Ld. CIT(A) upheld the penalty, emphasizing that the assessee failed to rebut the findings of the Assessing Officer and withdrew the appeal against the disallowance. The investigation revealed a scheme involving bogus donations and accommodation entries, with the institution providing false certificates for deductions. The appellant's claim of rectification was deemed an attempt to avoid penalty rather than a genuine disclosure.

3. The appellant argued that the penalty initiation was not specified in the rectification order, but the initiation was based on the assessment order discussing the disallowance. The appellant's claim of no inaccurate particulars was refuted, citing precedents and the appellant's response to the show cause notice. The penalty for furnishing inaccurate particulars was upheld based on legal decisions.

4. The appellant's assertion that proceedings u/s 147 were dropped, thus no concealment or inaccurate particulars existed, was rejected as separate from penalty proceedings. The contention regarding the printed format of the show cause notice was dismissed, as the appellant's response acknowledged the penalty reason. The penalty imposition for furnishing inaccurate particulars was upheld based on legal precedents.

In conclusion, the appeal was dismissed, and the penalty sustained based on the findings and discussions presented.