TMI Blog2015 (8) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... ve expenses while making computation of income. Wrong deduction of an amount for computation of income in the return submitted by the assessee is different. It cannot be equated with concealment. In our view it would not amount to furnishing of inaccurate particulars of income or concealment of income so as to attract penalty under section 271(1)(c) of the Act, 1961.The Commissioner of Income-tax (Appeals) and Tribunal both have recorded concurrent finding holding that there was no concealment of particulars of income by the assessee. Therefore, penalty under section 271(1)(c) of the Act, 1961, was not attracted - Decided in favour of assessee. Decision in CIT v. Prithpal Singh and Co. (2000 (7) TMI 75 - SUPREME Court) would have no appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the main provisions is merely a mandate to explain or clarify certain ambiguities which have crept in, in the statutory provisions (reliance on CIT v. Mohan Meakin Breweries Ltd. [1991] 192 ITR 134 (HP) and Laxmi Industries Ltd. v. ITO [1998] 231 ITR 514 (Raj)) ? Q. 4. Whether the Income-tax Appellate Tribunal is justified in ignoring the fact of the case that the assessee has not declared the pre-operative income amounting to ₹ 26,63,283 by capitalising the same with pre-operative expenses thereby furnishing inaccurate particulars ? Q. 5. Whether the Income-tax Appellate Tribunal is legally justified in holding that penalty under section 271(1)(c) of the Income-tax Act is not imposable when the assessed figure is less ? 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated January 30, 2003, passed by the Additional Commissioner of Income-tax, NOIDA, in purported exercise of power under section 271(1)(c) of Income-tax Act, 1961 (hereinafter referred to as the Act, 1961 ) stated that since there is a wrong deduction by the assessee about the aforesaid income, it amounts to furnishing incorrect particulars of income and, therefore, penalty was liable to be imposed. Obviously, the above authority did not find any concealment of particulars of income but a wrong deduction. 7. From the record we find that there was no inaccuracy in particulars of income furnished by the assessee. Out of various receipts, the assessee wrongly deducted aforesaid amount from his total pre-operative expenses while making compu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiate the penalty proceedings is not conferred on the assessing authority by reference to clause (c) of sub-section (1) of section 271 of the Income-tax Act, 1961. A bare reading of the provisions of section 271 and the law laid down by the Supreme Court makes it clear that, it is the assessing authority who has to form his own opinion and record his satisfaction before initiating the penalty proceedings. Merely because the penalty proceedings have been initiated it cannot be assumed that such a satisfaction was arrived at. 12. Further, in CIT v. Auto Lamps Ltd. [2005] 278 ITR 32 (Delhi), it was observed that (headnote) : without even mentioning the essential ingredients which the Assessing Officer is obliged to record for init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to record its satisfaction in the assessment order pertaining to it. There is no whisper in the assessment order regarding the levy of the penalty. When it so then we find no reason to interfere with the impugned order. The same is hereby sustained along with the reasons men tioned therein. 16. In view of the discussion made above, question No. 1, is answered in favour of the assessee and against the Revenue. 17. So far as question No. 2 is concerned we find that therein a dispute pertains to the assessment year 1970-71, when Explanation 4 to section 271(1)(c) was not in existence. After the amendment was made by the Finance Act, 2002, with effect from April 1, 2003, a larger Bench of the apex court in CIT v. Gold Coin Health Foo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application to the case in hand. 20. So far as questions Nos. 3 and 5 are concerned, we find that these questions stand answered by the apex court's decision in CIT v. Gold Coin Health Food P. Ltd. (supra), therefore, the same have to be answered in favour of the Revenue. 21. However, the view taken by the Tribunal is unsustainable to the extent the Tribunal has allowed the cross-objection filed by the assessee. Questions Nos. 3 and 5 are answered in favour of the Revenue. 22. In the result, this appeal is partly allowed. The impugned order passed by Tribunal is set aside to the extent it has allowed the assessee's cross- objection. The assessee's cross-objection stands rejected. 23. However, so far as the decision r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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