TMI Blog2017 (11) TMI 1765X X X X Extracts X X X X X X X X Extracts X X X X ..... ould make the penalty order bad in law. - Decided in favour of assessee. Wrongful claim of bogus expenditure - A.Y. 2006-07 - Held that:- Where the assessee has completely withheld information about the income generated and there is no mention of such income either in the books or the return of income, such suppression of income would fall within the expression „concealment of income‟. It is not so in the present case. The assessee has made wrongful claim of bogus expenditure, therefore, it would be a case of furnishing of inaccurate particulars of income. Thus, in our considered view the Assessing Officer while recording satisfaction for levying penalty has erred in invoking wrong limb of section 271(1)(c). Consequently, the penalty has been levied under wrong charge for concealment of income. It is a case of furnishing of inaccurate particulars of income and not concealment of income. Since, the penalty u/s. 271(1)(c) has been levied on wrong charge - Appeal of assessee is allowed. - 356 to 359/PUN/2015 - - - Dated:- 10-11-2017 - SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM For the Appellant : S/Shri Nikhil Pathak/Sanket S. Bora For the Respondent : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 2006-07, 2007-08 and 2010-11 the ld. AR submitted that the assessee is a partnership firm engaged in the business of Clearing Agents and Freight forwarders. A survey action u/s. 133A of the Act was conducted on the business premises of assessee on 29-02-2012. During the course of survey the partners of the firm admitted that bogus expenses on account of purchases were booked to the credit of Ashtabhuja Enterprises and bogus commission payments to some other parties. The Assessing Officer in all the three assessment years initiated penalty proceedings u/s. 271(1)(c) for concealment of income. Thereafter, while issuing notice u/s. 274 r.w.s. 271(1)(c) the Assessing Officer mentioned both the charges i.e. concealed the particulars of income or furnished inaccurate particulars of income. Finally, while passing order levying penalty, the Assessing Officer levied penalty for concealment of income. The ld. AR contended that though while recording satisfaction and while levying penalty same limbs have been mentioned, but, the penalty has been initiated and levied on wrong limb/charge. The ld. AR submitted that it is a case of furnishing of inaccurate particulars of income and not conceal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 (A.Y. 2005-06) 5. A perusal of the assessment order dated 29-10-2012 passed u/s. 143(3) r.w.s. 147 for assessment year 2005-06 shows that the Assessing Officer has recorded satisfaction for initiating penalty u/s. 271(1)(c) for concealment of income. The relevant extract of the assessment order where the Assessing Officer has recorded satisfaction for initiating penalty is reproduced here-in-below : The penalty proceedings under section 271(1)(c) of the I.T. Act are initiated for concealment of the income of ₹ 77,45,900/-. 6. Thereafter, the Assessing Officer issued notice u/s. 274 r.w.s. 271(1)(c) on 29-10-2012 wherein the Assessing Officer mentioned both limbs of section 271(1)(c) i.e. concealed the particulars of income or furnished inaccurate particulars of income. Both the limbs were mentioned with conjunction or‟. Thereafter, at the time of passing order levying penalty u/s. 271(1)(c), the Assessing Officer held that penalty is being levied for furnishing inaccurate particulars of income. The relevant extract of the order levying penalty dated 30-04-2013 reads as under : Accordingly, I hereby levy the penalty of ₹ 17,65,918/- for furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo expressions by placing reliance on the decision rendered in the case of Commissioner of Income Tax Vs. Reliance Petroproducts (P.) Ltd. (supra). The findings of the Hon‟ble High Court are as under : 8. At this juncture it may be apposite to refer to the decision of the Supreme Court in the case of Commissioner of Income Tax v. Reliance Petroproducts Pvt. Ltd., (2010) 322 ITR 158, wherein the court while interpreting the provisions of section 271(1)(c) of the Act, has held that a glance at the said provision would suggest that in order to be covered by it, 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. In the facts of that case, the court found that it was not a case of concealment of the particulars of the income, nor was it the case of the revenue either. However, the counsel for the revenue suggested that by making an incorrect claim for the expenditure on interest, the assessee had furnished inaccurate particulars of income. The court observed that it had to only see as to whether in that case, as a matter of fact, the assessee had given inaccurate particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions rendered in the cases of Prempal Gandhi Vs. Commissioner of Income Tax (supra) and Commissioner of Income Tax Vs. Usha International Ltd. (supra), we have perused both the decisions. The aforesaid decisions are distinguishable on facts of the case and hence, do not support the cause of Revenue. 12. Where the assessee has completely withheld information about the income generated and there is no mention of such income either in the books or the return of income, such suppression of income would fall within the expression concealment of income‟. It is not so in the present case. The assessee has made wrongful claim of bogus expenditure, therefore, it would be a case of furnishing of inaccurate particulars of income. Thus, in our considered view the Assessing Officer while recording satisfaction for levying penalty has erred in invoking wrong limb of section 271(1)(c). Consequently, the penalty has been levied under wrong charge for concealment of income. It is a case of furnishing of inaccurate particulars of income and not concealment of income. Since, the penalty u/s. 271(1)(c) has been levied on wrong charge, the same is unsustainable. Accordingly, the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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