2020 (9) TMI 58 - AT - Income Tax

Penalty u/s 271(1)(c) - concealment of particulars of income or furnishing inaccurate particulars of income - assessee is defaulter for concealing particulars of his income - HELD THAT - AO in the show-cause notice has initiated the penalty proceedings for concealing the particulars of income or furnished inaccurate particulars of such income and subsequently, while passing the penalty order, the AO has levied penalty for concealing the particulars of income. AO has initiated the penalty proceedings on both the charges, while levying the penalty, the AO has levied the penalty on a specific and clear-cut charge for concealing the particulars of income. Therefore, it is not a case where the penalty has been initiated for a particular charge and thereafter, penalty has been finally levied on a different charge. The assessee was made aware of both the charges at the time of initiation of penalty proceedings and while finally levying the penalty, the AO has given a specific finding that it is a case of concealment of particulars of income. Even where it is held that the charge is uncertain at the initiation stage, the same has been made definite while passing the penalty order, therefore, it is not a case of lack of opportunity to the assessee as well as lack of application of mind on the part of the Assessing officer. It is not a case of the assessee that the charge of concealment of particulars of income is not attracted in the facts of the present case. AO has invoked the provisions of explanation 5A to section 271(1)(c) which has been confirmed by the ld CIT(A). The ld. CIT(A) has dismissed the contention of the assessee of suo motu filing the revised return of income for the reason that such return has been filed, even though the disclosing unexplained investment in jewellery found during the course of search, subsequent to the date of search. - Decided against assessee.

Summary

Issues:
Levy of penalty under section 271(1)(c) for A.Y 2012-13 based on concealment of income particulars without specifying the charge in the show cause notice.

Analysis:
The appeal was filed against the order confirming the penalty under section 271(1)(c) for concealing income particulars for A.Y 2012-13. The Assessing Officer initiated penalty proceedings without specifying the charge in the show cause notice. The assessee contended that this lack of specificity vitiates the proceedings, citing a decision by the Hon'ble Rajasthan High Court. However, the ld. CIT(A) upheld the penalty, referring to a Supreme Court decision. The Assessing Officer, in the penalty order, found the assessee guilty of concealing income particulars. The ld. CIT(A) dismissed the contention that the penalty was unsustainable due to a variation in the charge specified in the notice and the penalty order. The ld. DR argued that the penalty notice defect did not deny natural justice, citing a Supreme Court decision. The Assessing Officer invoked explanation 5A to section 271(1)(c) to justify the penalty, despite the assessee declaring the income post-search. The Tribunal upheld the penalty, emphasizing that the charge was specific during the penalty levy, distinguishing the case from precedents where lack of specific findings invalidated penalties.

The Tribunal found that the Assessing Officer had clearly specified the charge of concealing income particulars during the penalty levy, even though the show cause notice lacked specificity. The Tribunal held that the assessee had been aware of both charges from the initiation of penalty proceedings. The ld. CIT(A) and the Assessing Officer had given specific findings justifying the penalty for concealing income particulars. The Tribunal distinguished the case from precedents where penalties were invalidated due to lack of specific findings, emphasizing that in this instance, the charge and findings were clear during the penalty levy. The Tribunal confirmed the penalty, rejecting the assessee's arguments and upholding the lower authorities' decision.

Therefore, the appeal of the assessee against the penalty for concealing income particulars was dismissed by the Tribunal.