9911796707
Advanced Search 
TMI Blog2018 (7) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... lty to the tune of `1,02,53,238/- under Section 271(l)(c) of the Income Tax Act, 1961 in the circumstances of the case?" 2. The relevant facts are that the assessee company was primarily engaged in manufacturing of 'black and white' ("B&W" hereafter) picture tubes for use in televisions. As the market for black and white televisions declined sharply in the year 1995-96 the assessee was forced to shut down the manufacture of B&W picture tubes in financial year 2005-06. During the Financial Year 2007-08, in order to continue in the business, the assessee company decided to set up another project for manufacture of 'metal parts' for which the company purchased some machinery to the tune of `3.34 crores. The Company was unable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly penalty proceedings under Section 271(1)(c) of the Act were initiated on the issue of the writing off of capital work-in-progress, i.e. the subject matter of disallowance, which was taxed for the relevant assessment year. The AO issued notice dated 18.04.2012 fixing the date for hearing on 24.04.2012 which was received by the assessee on 24.04.2012 itself. By letter dated 27.04.2012, the assessee sought time for filing a reply but the AO proceeded to pass the penalty order without affording further time to the assessee and imposed a penalty of `1,02,53,238/- for making a wrong claim in the return of Income. Aggrieved, the assessee approached the Appellate Commissioner, who confirmed the penalty by holding that on the facts of the case it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l pay by way of penalty- (i) in the cases referred to in clause (c) or clause (d), in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or fringe benefits or the furnishing of inaccurate particulars of such income or fringe benefits." 8. A plain reading of the provision shows that the penalty under Section 271(1)(c) is levied only on an assessee who either "conceals" or if it/he/she "furnishes inaccurate particulars of his income". At the outset it is necessary to mention that even though the AO did not decide the character of the loss occurred, he conceded to the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticulars. Mere omission from the return of an item of receipt does neither amount to concealment nor deliberate furnishing of inaccurate particulars of income unless and until there is some evidence to show or some circumstances found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. In order that a penalty under Section 271 (1) (iii) may be imposed, it has to be proved that the assessee has consciously made the concealment or furnished inaccurate particulars of his income." 10. The court also emphasized that the provision of the Act is penal, and not akin to those in statutes that impose strict l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urate" has not been diluted. 12. From the facts of this case it is clear that the assessee disclosed all the particulars of his income. The AO has disallowed his claim without holding it to be bogus or false. Hence, the genuineness of the loss occurred is not at question here. The Supreme Court while elaborating the scope of section 271(1)(c) in CIT vs Reliance Petroproducts Pvt Ltd [2010] 322 ITR 158 held that- "A glance of provision of section 271(l) (c) would suggest that in order to be covered, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The instant case was not the case of concealment of the income. That was not the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
