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TMI Blog2016 (8) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... ] has been upheld. 2. Although the assessee has raised as many as eight grounds of appeal, the main effective grounds challenging the denial of opportunity of being heard to the assessee and upholding the penalty have been stated in Ground Nos. 1 and 4 and other grounds are supportive to these main grounds. Ground Nos. 1 and 4 read as under: "1. That on the facts and circumstances of the case and in the law, Ld. Commissioner of Income Tax(Appeals) has erred when he has sustained the penalty amount of Rs. 1,19,860/- imposed by Ld. Assessing officer U/s 271 (1)(c) of the Income Tax Act, 1961 because the Assessing officer did not discuss the finding to reach on his conclusion of the fact that in what manner appellant company concealed the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal after considering the material avai lable on record inter alia. The ld. DR final ly submitted that in this situation, the first appel late authority had no option but to decide the appeal exparte, therefore, there was no violation of principles of natural justice and thus the allegation of the assessee in this regard may kindly be rejected. 5. From the relevant operative para 4.1 to the end of the impugned order, we observe that the CIT(A) has reproduced written submissions of the assessee and thereafter noted the facts regarding imposition of penalty but there is no specific discussion regarding all the three issues on which penalty has been imposed by the assessee i.e. donation paid but added by the AO in the computation of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e clearly not admissible as per provisions of the Act attract penalty. 7. Reiterating its submissions made before the CIT(A), the ld. AR submitted that the expenditure on donation was nothing but absolute business expenditure which was duly declared as per Income-tax return fi led and thus the imposition of penalty in respect of said amount of donation is erroneous and unjustified. The ld. AR final ly pointed out that the claim of donation was not al lowed as the recipient done was not enjoying the exemption u/s 80G of the Act and the amount of donation was paid to non el igible institutions in pursuance of business needs of the assessee and merely because the same was not allowed to the assessee, penalty cannot be imposed by al leging tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trongly supported the penalty order as well as the impugned order of the CIT(A) and contended that the assessee has been unable to justify its claim of fil ing of wrong particulars of income on al l three counts and it is not a case of bonafide mistake on the part of the assessee. The ld. DR vehemently pointed out that the assessee has fi led inaccurate particulars of income, therefore, intention of the assessee was to evade tax and mens rea therein are clearly established. Therefore, the AO was correct in imposing penalty which was rightly upheld by the CIT(A). 11. On careful consideration of the above rival submissions, on the issue of donation, we note that neither the assessee nor the CIT(A) has brought out any fact that the claim of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pronouncements, penalty can be levied in this case or not, we would like to discuss in nut shell the relevant legal position regarding levy of penalty u/s 271(1)(c) of the Act and as to how and when such penalty can be levied under this section. There are no two opinions about the settled position of law that regular assessment proceedings and penalty proceedings are two entirely different subjects which operate in distinct and separate spheres so much so that entirely different parameters are applicable for making quantum addition and for levying penalty under section 271(1)(c) of the Act. There can be no dispute with regard to the position of law that under section 271(1)(c) penalty can be levied only if either the act of "concealment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word "particulars" used in section 271(1)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only docum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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