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2015 (8) TMI 12 - ITAT KOLKATA

2015 (8) TMI 12 - ITAT KOLKATA - TMI - Penalty under section 271(1)(c) - Held that:- In this case, the Assessing Officer has not brought out any specific charge for which the penalty has been imposed on the assessee u/s 271(1) (c) of the Act. He has not brought out whether the assessee has concealed the particulars of income or whether the assessee has furnished inaccurate particulars of income. In CIT v. Atul Mohan Bindal (2009 (8) TMI 44 - SUPREME COURT] where Hon'ble Supreme Court was conside .....

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f particulars of income or furnishing of inaccurate particulars of income on the part of the assessee. On this basis itself the penalty deleted. - Decided in favour of assessee. - ITA No. 931/KOL/2013 - Dated:- 4-6-2015 - Shri P. K. Bansal, AM,JJ. For the Appellant : Shri Subash Agarwal, Adv. For the Respondent : Smt. Madhumalati Ghosh, JCIT, Sr DR ORDER This appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeal's), Central-II, Kolkata dated 25.02.2013 .....

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additional income of ₹ 7,96,291/- was made for the assessment years 2004-05 to 2007-08. For the impugned assessment year disc losure of ₹ 2,25,659/- was made. The assessee filed his return of income declaring total income of ₹ 4,31,767/- which includes the additional income of ₹ 2,25,659/-. The original return of income was filed on 31.01.2008, wherein the additional income was not declared. The assessment was completed on 31.12.2010 at the assessed income of ₹ 4,3 .....

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erving as under:- "On the basis of the detailed discussion above, I am of the opinion that the assessee deserves no leniency so far as this proceedings under section 271(1)(c) is concerned. His reply is not at all satisfactory and hence rej ected. The quantum of tax sought to be evaded is calculated at ₹ 64,747/-, which is the difference between quantum of tax determined in the order under section 153C/143(3) on 31.12.2010 and the tax liability shown by the assessee in his original re .....

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lkata u/s. 274(2) of the I.T. Act". 4. Section 271 (1)(c) reads as under:- "271 (1) If the Assessing Officer or the Commissioner (Appeals) [or the commissioner] in the course of any proceedings under this Act, is satisfied that any person - (a) ….. (b) ….. (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, or (d) ….. He may direct that such person shall pay by way of penalty, - Explanation 1- Where in respect of any .....

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n, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause © of this sub-section be deemed to represent the income in respect of which particulars have been concealed." 5. From the perusal of the aforesaid section, it is apparent that penalty u/s 271 (1)(c) is leviable if the Assessing Officer is satisfied in the course of any proceedings under this Act that any person has concealed the particulars of his income .....

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ice versa. Thus, there must be a clear finding about the charge for which penalty is imposed or initiated. It is incumbent upon the Assessing Officer to state whether penalty was being levied for concealment of income or for furnishing of inaccurate particulars of income. In the absence of such findings, the order would be bad in law. The case of New Sorathia Engineering Co. Ltd., 282 ITR 642, Hon'ble Gujarat High Court has held as under: - "It is incumbent upon the assessing officer to .....

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al. The order was invalid." 6. In the case of Commissioner of Income Tax V. Rajan and Co. 291 ITR 340 (Del) , it is held that the provision of section 271 (1) (c) of the Income Tax 1961 would require proper application of mind and recording of at least a bare minimum opinion on the part of Assessing Officer that a case for initiation of penalty proceeding was made as there was concealment of income or that incorrect particulars had been furnished by the assessee with the intention to avoid .....

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levied for concealment of particulars of income or furnishing of inaccurate particulars of income. It is the particulars of income which is the common subject matter of both the charges. The word 'conceal' as per Webster's Dictionary means "to hide, withdraw, or remove from observation; cover or keep from sight; to keep secret; to avoid disclosing or divulging. That means non disclosure of particulars of income. On the other hand, where particulars are disclosed but such disclos .....

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of inaccurate particulars of income since it provides a deeming fiction qua concealment of particulars of income only and consequently cannot be extended to a case where charge against the 'Assessee' is furnishing of inaccurate particulars of income. On the other hand, where charge against the 'Assessee' is concealment of particulars of income, the Assessing Officer has to establish either that 'Assessee' has not disclosed the particulars of income under the main provisi .....

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allowed in computing the total income of the assessee shall be deemed to be the income in respect of which particulars have been concealed. This deeming provision is not absolute one but is rebuttable one. It only shifts the onus on the assessee. Explanation 1 refers to the two situations in which presumption of the concealment of the particulars of income is deemed. It is not applicable where the charge against the assessee is furnishing inaccurate particulars of the income. The first situation .....

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