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TMI Blog2025 (2) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... ear cut classification as to whether the penalty has been levied for "concealment of income" or "furnishing inaccurate particulars of income". It is a well settled principle that the AO has to give an absolute and categorical findings while levying the penalty u/s. 271(1)(c) of the Act, whether the same is being levied for "concealment of income" or "furnishing inaccurate particulars of income".
Thus, in the absence of specific findings whether the penalty has been levied for "concealment of income" or "furnishing inaccurate particulars of income" the penalty order is liable to be set-aside. Appeal of the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... o tax as "short term capital gains" in the return of income. Accordingly, the AO held that the assessee had offered incorrect amount of "short term capital gains" on the transactions in securities in the return of income and added a sum of Rs. 5,80,116/- (5,90,935 - 10,819) as "short term capital gains" which were not offered to tax by the assessee. The AO also initiated penalty proceedings u/s. 271(1)(c) of the Act. The assessee did not file appeal before the Ld.CIT(A), against the quantum additions made by the Assessing Officer. 4. In the penalty appeal u/s. 271(1)(c) of the Act, the AO levied the penalty u/s. 271(1)(c) of the Act, @ 100% of the tax sought to be evaded. 5. In appeal, the Ld.CIT(A) confirmed the penalty with the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the payment was made to buy peace also does not come to her rescue. Consequently, this ground of appeal filed by the appellant is also dismissed. 6. The assessee is in appeal before us, against the aforesaid order passed u/s. 271(1)(c) of the Act. The Ld. Counsel for the assessee submitted that the assessee did not appeal against the quantum order passed by the AO due to the smallness of quantum of tax involved. The assessee was not inclined to pursue the matter any further in appellate proceedings. Accordingly, in order to buy peace of mind, the assessee decided to pay taxes on this amount. However, so far as penalty is concerned, the Ld. Counsel for the assessee argued that this is a fit case were no penalty is called for. The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order is liable to be set-aside. 7. In response, the Ld. DR placed reliance on the observations made by the AO and the Ld.CIT(A) in their respective orders confirming the levy of penalty u/s. 271(1)(c) of the Act. 8. We have heard the rival contentions and perused the material available on record. It will be useful to reproduce the relevant extract of section 71(2) of the Act, which reads as under: "Where in respect of any assessment year, the net result of the computation under any head of income, other than "Capital gains", is a loss and the assessee has income assessable under the head "Capital gains", such loss may, subject to the provisions of this Chapter, be set off against his income, if any, assessable for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) is concerned, no penalty is leviable u/s. 271(1)(c) of the Act in the assessee's set of facts. 10. Without prejudice to the above findings, we also observed that in the notice issued for the levy of penalty, the AO has initiated the penalty proceedings with the following observations. "Whereas in the course of proceedings before me for the Assessment Year 2015- 16, it appears to me that you have concealed the particulars of income or furnished inaccurate particulars of such income" 11. Further, while passing the order imposing penalty u/s. 271(1)(c) of the Act, the AO has levied the penalty with the following observation: "Keeping in view of the above, FAO is of the opinion that the assessee has concealed/furnished inaccura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f particulars of his income or furnishing inaccurate particulars, Tribunal was justified in quashing penalty proceedings under section 271(1)(c) initiated against assessee. 12.2 In the case of Principal Commissioner of Income-tax vs. Unitech Reliable Projects (P.) Ltd. [2024] 166 taxmann.com 135 (SC)/[2024] 300 Taxman 585 (SC)/[2024] 469 ITR 394 (SC)[14-08- 2024] the Assessing Officer made additions to assessee's income and triggered penalty proceedings under section 271(1)(c) and further levied penalty. The Tribunal having found that notice issued under section 274 did not specify as to limb under which penalty was sought to be imposed, i.e., notice did not indicate as to whether penalty was to be levied on account of concealment of i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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