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TMI Blog2016 (5) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... on the following grounds. On the facts and circumstances of the case, the Ld.CIT(A) erred: 1. In sustaining the penalty of ₹ 3,56,166/- imposed by the AO u/s 271(1)(c ) of the Income Tax Act 1961 (the Act) after disallowing the expenditure claimed by the assessee in its normal course of business. 2. In sustaining the said penalty ignoring the settled law that the disallowance of expenditure claimed per se does not by itself leads to the inference that the assessee had concealed the particulars of his income or furnished inaccurate particulars of such income. 3. In sustaining the said penalty ignoring that the assessee is in the business of investment and trading company and in order to maintain its status of a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred by the assessee to the tune of ₹ 10,66,545/- is to be allowed under the head of income from business or profession or to be apportioned between various heads of income earned by the assessee. The assessee has income from rent, interest, dividend, long term capital gain and short term capital gain. When the assessee has income from dividend, interest and capital gain, to say that the assessee has not done any business during the year, in our view, is not correct. Be it as it may, there is no furnishing of inaccurate particulars of income of concealment of income in this case. The issue whether the expenditure of ₹ 10,66,545/- is to be allowed under the head income from business or whether it has to be apportioned bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty for breach of civil obligations or liabilities. (c) Wilful concealment is not an essential ingredient for attracting civil liability. (d) Existence of conditions stipulated in Section 271(1)(c) is a sine qua non for initiation of penalty proceedings under Section 271. (e) The existence of such conditions should be discernible from the Assessment Order or order of the Appellate Authority or Revisional Authority. (f) Even if there is no specific finding regarding the existence of the conditions mentioned in Section 271(1)(c), at least the facts set out in Explanation l1(A) and (B) it should be discernible from the said order which would by a legal fiction constitute concealment because of deeming provision. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the computation of his total income have been disclosed by him, no penalty could be imposed. (n) The direction referred to in Explanation IB to Section 271 of the Act should be clear and without any ambiguity. (o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the Assessing Authority. (p) Notice under Section 274 of the Act should specifically state the grounds mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. (q) Se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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