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2009 (1) TMI 537 - AT - Income TaxLevy of Penalty u/s 271(1)(c) - concealed income and furnished inaccurate particulars of income - HELD THAT:- AO cannot invoke provision of section 271(1)(c) on the basis routine and general presumptions. Whether it be a case of only concealment or of only inaccuracy or both, the particulars of income so vitiated would be specific and definite and be known in the assessment proceedings by the ITO, who on being satisfied about each concealment or inaccuracy of particulars of income would be in a position to initiate the penalty proceedings on one or both of the grounds of default as may have been specifically and directly detected. We find that the assessee has disclosed all the relevant material facts for the purpose of computation of total income. We also find that the assessee has offered explanation in this regard, which was not found false by AO. The explanation of assessee regarding claim of interest expenditures is bona fide. The assessee has substantiated his explanation. When the assessee has furnished all the material facts for the purpose of computation of total income the AO is duty bound to calculate correct total income in accordance with law, which may be different than the total income calculated by the assessee. Mere fact that AO while discharging his duty is recalculating the total income in accordance with law which is not the same as calculated by the assessee, it cannot be held that the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income or there is a deemed concealment in accordance with Explanation 1 to section 271(1). This is not a fit case, where penalty under section 271(1)(c) read with Explanation 1 can be invoked - the penalty of Rs. 9,21,803 levied by the Assessing Officer under section 271(1)(c) of the Act is cancelled - the appeal of the assessee is allowed.
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