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2020 (8) TMI 445 - HC - Income TaxLevy of penalty u/s 271(1)(c) - Defective notice - Addition of capital capital - “concealment of particulars of his income” and “furnishing inaccurate particulars of such income” - HELD THAT:- Two limbs of Section 271(1)(c) of the Act and also the fact that the two limbs i.e. concealment of particulars of income and furnishing inaccurate particulars of income carry different connotations. We have also noticed that the Assessing Officer has to indicate in the statutory notice for which of the two limbs he proposes to impose the penalty and for this the notice has to be appropriately marked. If in the printed format of the notice the inapplicable portion is not struck off thus not indicating for which limb the penalty is proposed to be imposed, it would lead to an inference as to nonapplication of mind, thus vitiating imposition of penalty. The word ‘particulars’ used in Section 271(1)(c) of the Act would embrace the meaning of the details of the claim made. Referring to Webster’s Dictionary where the word ‘inaccurate’ has been defined as ‘not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript’, Supreme Court held that the two words i.e., ‘inaccurate’ and ‘particulars’ read in conjunction must mean that the details supplied in the return are not accurate, not exact or correct, not according to truth or erroneous. It was held that mere making of a claim which is not sustainable in law by itself would not amount to furnishing inaccurate particulars regarding the income of the assessee. In the present case, concealment of particulars of income was not the charge against the appellant, the charge being furnishing of inaccurate particulars of income. As discussed above, it is trite that penalty cannot be imposed for alleged breach of one limb of Section 271(1)(c) of the Act while penalty proceedings were initiated for breach of the other limb of Section 271(1)(c). This has certainly vitiated the order of penalty. Assessee had declared the full facts and the sale agreement at the first instance; the full factual matrix or facts were before the AO while passing the asessment order. It is clear from the facts that the appellant had never suppressed any material fact from the respondent. Hence we are inclined to accept the submissions of the appellant. It is another matter that the claim based on such facts was found to be inadmissible. This is not the same thing as furnishing inaccurate particulars of income as contemplated under Section 271(1) (c) - Decided in favour of assessee.
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