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2021 (1) TMI 773 - AT - Income TaxPenalty u/s 271(1)(c) - Mandation of recording satisfaction - disallowance u/s 14A - HELD THAT:- It is a settled law that while levying penalty for concealment, the AO has to record satisfaction and thereafter come to a finding in respect of one of the limbs, which is specified under section 271(1)(c) of the Act. The first step is to record satisfaction while completing the assessment as to whether the assessee had concealed its income or furnished inaccurate particulars of income. Thereafter, notice u/s 274 read with Section 271(1)(c) of the Act is to be issued to the assessee. AO has to levy penalty under Section 271(1)(c) for non-satisfaction of either of the limbs. While completing the assessment, the Assessing Officer has to come to a finding as to whether the assessee has concealed its income or furnished inaccurate particulars of income. For the imposition of penalty u/s 271(1)(c) of the Act either concealment of particulars of income or furnishing inaccurate particulars of such income are since qua non. It is a settled law that penalty cannot be imposed for alleged breach of one limb of Section 271(1)(c) while penalty proceedings are initiated for breach of other limb of the section. - Decided in favour of assessee.
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