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2017 (1) TMI 188 - AT - Income TaxLevy of penalty u/s 271 (1) (c) - non recording of satisfaction for initiating penalty - assessee furnished the returns of income in response to the notice issued under section 153A - Held that:- Assessing Officer has to at initial stage itself come to a finding as to whether the additions made in the hands of assessee justify the levy of penalty proceedings under section 271(1)(c) of the Act on account of concealment of income or furnishing of inaccurate particulars of income. We find that in the present set of facts, the Assessing Officer has recorded satisfaction for initiating penalty proceedings on account of concealment of income and furnishing of inaccurate particulars of income. Under the provisions of section 271(1)(c) of the Act, penalty for concealment is leviable where the assessee has fulfilled either conditions i.e. concealment of income or furnishing of inaccurate particulars of income. The Assessing Officer while initiating penalty proceedings has to be satisfied as to under which limb, the penalty is leviable and consequent thereto, issue notice in this regard. However, in the facts of the present case and as pointed out hereinabove, the Assessing Officer has failed to record satisfaction correctly and consequently, we hold that initiation of penalty proceedings against the assessee are not valid for non-recording of satisfaction by the Assessing Officer while completing assessment proceedings. Assessing Officer has failed to strike off either of the limbs of section 271(1)(c) of the Act, which are not satisfied by the assessee and consequently, notice issued under section 274 r.w.s. 271(1)(c) of the Act is bad in law and order levying penalty for concealment thereafter, is infructuous. Accordingly, we hold so. The Statute has provided distinction between concealment of income and furnishing of inaccurate particulars of income, which may be thin line of distinction, but the same has to be kept in mind while recording satisfaction by the Assessing Officer. - Decided in favour of assessee.
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