TMI Blog2015 (3) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... ffered by the assesse is false, then the penalty can be levied on the amount which is found to be concealed. Therefore, the whole idea behind Explanation 1 is that the AO has to first record reasons for arriving at a conclusion that there is concealment on the part of the assessee. After seeking an explanation if the authority comes to a conclusion that it is false, then the AO can proceed to levy the penalty. The findings given in the assessment proceedings cannot operate as res-judicata, because the considerations that arise in the penalty proceedings are different from those in the assessment proceeding. In case of Reliance Petroproducts (2010 (3) TMI 80 - SUPREME COURT ), Hon’ble Supreme Court has deleted the penalty, which was impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, it was contended by the assessee that penalty u/s.271(1)(c) is not leviable on the disallowance made by the AO where additions has been made due to difference in opinion on disputable issue. However, the AO did not agree with the contentions of the assessee. The AO observed in the penalty order that the additions have been sustained by the CIT(A). The AO has further held that the assessee has furnished inaccurate particulars of income in respect of the above referred addition on account of disallowance u/s.14A of the I.T.Act. Accordingly, 100% penalty of the tax sought to be evaded was levied on the assessee. 3. By the impugned order, the CIT(A) deleted the penalty after considering various judicial pronouncements as discussed at page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a.), the penalty ujs.271(1)(c) of the I.T.Act,1961 is not justified hence the same is deleted. 4. The contention of the assessee before the AO was that it had not incurred any specific expenditure in earning of the dividend income which has been received on the investment of the assessee, even investment was made out of its own surplus funds. However, the AO has computed the disallowance as per rule 8D. 5. The CIT(A) while deleting the penalty observed that as per assessment order and penalty order, no specific expenditure was directly linked with the earning of exempt income, therefore, it cannot be inferred that assessee has furnished any inaccurate particulars of income/expenditure or the assessee has concealed its income. The dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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