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2009 (3) TMI 639 - AT - Income TaxPenalty levied u/s 271(1) - inaccurate particulars of income or concealment of particulars of income - Whether penalty u/s 271(1)(c) r/w Explanation 1 of section 271(1) is applicable - AO noticed that the assessee has wrongly claimed deduction u/s 80-I and u/s 80HH - CIT(A) deleted the deduction of addition made by AO u/s 80HHC and the additions on account of sections 80-I and 80HHC has not been agitated by the assessee against CIT(A). AO levied penalty. HELD THAT:- The proceedings u/s 271(1)(c) can be initiated only if the AO or the first Appellate Authority is satisfied in the course of any proceedings under the Act. If he is satisfied as per clause (c) that any person has concealed the particulars of his income or has furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty the sum mentioned in sub-clause (iii) of clause (c). The expressions "has concealed the particulars of income" and "has furnished inaccurate particulars of income" have not been defined either in section 271(1)(c) or elsewhere in the Act. One thing is certain that these two circumstances are not identical in detail although they may lead to the same effect, namely, keeping off a certain portion of income. The former is direct and the latter may be indirect in its execution. The word "conceal" is derived from the latin concelare which implies con+celare to hide. Webster in his New International Dictionary equates its meaning "to hide or withdraw from observation, to cover or keep from sight; to prevent the discovery of; to withhold knowledge of". The offence of concealment is thus a direct attempt to hide an item of income or a portion thereof from the knowledge of the income-tax authorities. The duty is enjoined upon him to make a complete disclosure of his income as well as a correct disclosure. Therefore, if the disclosure made of the particulars of income is incorrect, then also he commits breach of his duty. Such defaults entail the penal consequences contemplated by section 271(1)(c)( iii). We notice that the assessee has furnished all the particulars of income and AO has calculated the total income on the basis of those particulars filed by the assessee. The assessee has right to claim all deductions which according to him are permissible in law. It is the duty of AO to calculate correct income in accordance with law. If AO found otherwise on considering the material filed by the assessee, we do not find that in such cases where AO computed the different total income than the total income declared by the assessee is amount to furnishing of inaccurate particulars of income concealment of particulars of income. In the case under consideration, the assessee has claimed deduction u/s 80-IA for one more year i.e., for assessment year 1998-99 whereas he was eligible for deduction u/s 80-IA up to 1997-98. There is a simple calculation of total years of the allowability which appears to be a prima facie mistake in calculation of the period. Before completion of the assessment, the assessee has pointed out this mistake and filed a revised return though it is filed after stipulated period prescribed u/s 139(5). Still we find that it is not a case of furnishing inaccurate particulars of income or concealment of particulars of income. In the light of the above discussion, we find that it is not a fit case for penalty leviable u/s 271(1)(c). The appeal of the assessee is allowed.
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