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TMI Blog2013 (8) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer made any inquiry about them. The first appellate authority has given a categorical finding about the dates of inquiry initiated by the Assessing Officer and offering of advances for subsequent years and from his order it is clear that the assessee had on its own paid tax on the amounts-in-question. It is not a case where the assessee had concealed the facts of earning of income rather it is a case where the year of taxability of income was in dispute. The Assessing Officer and the assessee had different opinions about the year in which the same should be taxed. In our opinion, in such matters penalty under section 271(1)(c) cannot be levied. - Decided against Revenue. - ITA No.4509/Mum/2012 - - - Dated:- 21-8-2013 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturing and sale of elevators and lifts, filed its return of income on April 2, 2007, declaring income of ₹ 89.04 crores. On December 29, 2012, the Assessing Officer finalised the assessment under section 143(3) of the Act, determining the total income of the assessee at ₹ 156.05 crores. In the said assessment order an addition of ₹ 7.35 crores on account of advances received from customers was made. The Assessing Officer issued notice under section 274 read with section 271(1)(c) for levying penalty. After considering the submission of the assessee, the Assessing Officer levied penalty of ₹ 2,47,59,926 for furnishing inaccurate particulars of income. He held that the offering of advances for taxation in a subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not dictated by course of assessment proceedings for the assessment year 2007-08, that it was not fair to levy penalty when dispute between the assessee and the Assessing Officer was only about the taxability of the income and not about deduction of any income which had not been offered for taxation at all. Relying upon the order of Deputy CIT v. Ms. Aishwarya Rai [2007] 12 SOT 114 (Mumbai), the first appellate authority held that the facts of that case were applicable in the case under consideration, that Mumbai Tribunal had deleted the penalty levied in that case. He further held that every addition made in course of assessment proceedings should not be treated as the basis for imposing the penalty, that in the case under consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat any details supplied by the assessee in its return are found to be incorrect/erroneous/ false there is no question of imposition of penalty under section 271(1)(c). (iii) Evidences produced and issues decided during assessment proceedings are not final or binding in penalty proceedings. The provisions for finalising assessment proceedings and for imposing penalty have been incorporated in tax laws for different purposes. During the assessment or appellate proceedings the Assessing Officer or the First Appellate Authority can draw a conclusion that particular item forms part of income of the assessee. But, such conclusion or finding cannot or should not become sole basis for imposing penalty. In other words, confirmation of any disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) of the Act. (ix) Penalty also cannot be imposed, if a claim of the assessee for an incurred expenditure is rejected. (xi) Non-deduction of tax as per the provisions of Chapter XVII of the Act, should not result in imposition of penalty under section 271(1)(c) of the Act. Non-deduction of tax at source can result in other consequences, but imposition of concealment penalty in such cases is impermissible. (xii) Similarly, not getting the books of account audited cannot be equated with concealing the particulars of income/furnishing inaccurate particulars of income. There are separate penal provisions in the Act for not getting the books audited as per the provisions of section 44AD. But, for violation of those provisions, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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