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2015 (8) TMI 325 - AT - Income TaxPenalty u/s 271(1)(c) - AO observed that since assessee has earned income which he should have declared in the return of income, but, did not do so, he is liable to be visited with penalty u/s 271(1)(c) in view of explanation 1 and 5A of section 271(1)(c) - assessee in the application made before the Settlement Commission had offered additional income - Held that:- there is nothing in assessment order to suggest that additional income assessed at the hands of assessee is as a result of any incriminating material. Neither at the stage of assessment nor at the time of penalty proceeding, AO has brought any material on record to show that additional income really belongs to assessee. Only because assessee offered additional income at his hand that will not automatically lead to the conclusion that assessee has concealed his income or furnished inaccurate particulars of income. For imposing penalty u/s 271(1)(c), AO has to prove the fact of concealment by virtue of willful negligence or deliberate act by assessee. One more aspect which needs deliberation is, though in the penalty order, AO has in clear terms mentioned that imposition of penalty is for concealment of income and not furnishing of inaccurate particulars of income, but, ld. CIT(A) has observed that assessee has furnished inaccurate particulars of income. From the aforesaid facts, it is clear that the departmental authorities are not sure as to which limb of the penalty provision is attracted. Therefore, considering the totality of facts and circumstances and keeping in view, the observations made by Settlement Commission, we are of the opinion that since no conclusive finding or material has been brought on record to prove either concealment of income or furnishing of inaccurate particulars of income, imposition of penalty in the facts and circumstances of the present case is not justified. As far as the decisions relied upon by learned D.R. are concerned, though we fully agree with the principles laid down therein, however, they cannot be applied uniformly to all cases divorced from the facts on the basis of which such principle are decided. After careful analysis of the decisions, we are of the view that they will not apply to the facts of the present case. In aforesaid view of the matter, we are of the opinion that imposition of penalty under section 271(1)(c) in the facts of the present case is not justified. Accordingly, we delete the same. - Decided in favour of assessee.
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