2019 (11) TMI 1294 - AT - Income Tax

Penalty u/s 271(1)(c) - disallowance of expenses - proof of concealment of income and furnishing inaccurate particulars - HELD THAT - It is clear from the submission of the assessee that the assessee has disclosed apposite particulars of above referred various expenses and the circumstances under which these expenses were incurred. After considering these material facts and nature of expenses and the circumstances under which the impugned expenses were incurred, we do not find any substance in the decision of the ld. CIT(A) that the assessee has concealed the particulars of income. Therefore, we delete the impugned penalty levied u/s. 271(1)(c) - Decided in favour of assessee.

Summary

Issues: Appeal against penalty under section 271(1)(c) of the Income Tax Act for Assessment Year 2011-12.

Analysis:
1. The assessee filed an appeal against the penalty of ?1,67,517 imposed by the assessing officer under section 271(1)(c) of the Income Tax Act for the Assessment Year 2011-12.
2. The penalty was imposed based on additions made during scrutiny assessment, including disallowances for various expenses totaling ?5,04,300.
3. The CIT(A) confirmed the penalty, stating that the assessee furnished inaccurate particulars of income.
4. The assessee explained the reasons for each disallowance, such as prior period expenses, interest payments, consultancy fees, and welfare expenses, providing detailed submissions.
5. The Tribunal found that the assessee had disclosed appropriate particulars of the expenses and the circumstances under which they were incurred, concluding that there was no concealment of income.
6. Considering the facts and nature of expenses, the Tribunal held that the penalty under section 271(1)(c) was unwarranted and deleted the penalty.
7. The appeal of the assessee was allowed, and the penalty was set aside.

This judgment highlights the importance of providing detailed explanations for expenses during assessment proceedings to avoid penalties under the Income Tax Act. The Tribunal emphasized the need for transparency in disclosing income particulars, ultimately ruling in favor of the assessee due to the adequacy of explanations provided.