penalty u/s 271(1)(c)

[Asked by Guest]

if particular expenses rightly disallowed by the A.O. during the course of assessment  U/S 40a(ia) , would attract penalty provision U/s 271(1)(c)

[DEV KUMAR KOTHARI]

IT WILL DEPEND ON ALL RELEVANT FACTS AND CIRCUMSTANCES. THE YEAR, THE NATURE OF ASSESSEE, THE NATURE OF MISTAKE, THE PERSON WHO COMMITTED MISTAKE, THE INSTANCES OF APPLICABILITY OF PROVISIONS, REPEATED MISTAKES , MISTAKES EVEN AFTER WARNING ETC.

IN INITIAL YEARS LENIENT VIEW IS BEING TAKEN AS MANY SMALL TAXPAYERS HAVE BEEN TAKEN BY SURPRISE EVEN WHEN THEY WERE HELPED BY GENERAL TAX PRACTIONERS BECASUE THERE WAS MASS UNAWARENESS EVEN AMONGST MANY GENERAL TAX PRACTIONERS..

AI Summary

Penalty for inaccurate expense claims may arise when statutory disallowance is applied to reported deductions.
Whether a penalty arises when an assessing officer disallows certain expenses under the statutory disallowance provisions depends on whether the misstatement amounts to concealment or furnishing inaccurate particulars rather than a bona fide mistake. Relevant factors include the taxpayer's nature, who prepared the return, prior warnings or repeated errors, and professional advice. Authorities may be lenient in early years where there was genuine unawareness, but persistent or willful non compliance and mistakes after warning support imposition of the penalty provision under section 271(1)(c).