TaxTMI 
TaxTMI 
2010 (4) TMI 734
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....nbsp; 2. Both these appeals filed by the Revenue involve common issues, therefore, the same are being disposed of by this common order. 3. In both the appeals, the Assessing Officer levied the penalty under section 271(1)(c) of the Act to Rs.5,63,363/- and Rs.4,77,480/- under section 271(1)(c) by invoking Explanation-1 to section 271(1)(c) by holding that the assessee has filed inaccurate particulars of income and has thus concealed the income in each of the A.Y. 4. When the matter went before the CIT(A), the CIT(A) deleted the penalty levied by observing as under in A.Y. 2000-01 :- "I have considered the submissions of the learned AR with reference to various judicial pronouncements relied upon by him. The penalty u/....
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....me cannot automatically be adopted as a finding to that effect in a penalty proceedings." In case of CIT Vs. Kisan Chand Tara Chand (1999) 151 Taxation 72 (MP) and Thiruarooran Sugar Limited Vs. Assistant CIT (2000) 117 STC 457 (SC), it was held that where the claim of assessee was under a bona fide belief, from the mere fact that the claim of the assessee has been negatived by the Assessing Officer, it does not amount to concealment of income or furnishing of inaccurate particulars. The Hon'ble Delhi High Court in case of Additional CIT Vs. Delhi Cloth and General Mills Company Limited (1986) 157 ITR 822, held that penalty for concealment of income can be imposed only if there is a conscious and deliberate concealment on the part of the as....
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....made. Explanation 1 to section 271(1)(c) was clearly applicable and, therefore, the penalty under section 271(1)(c) was imposable to the extent of the tax sought to be evaded. 7. Ld. A.R., on the other hand, vehemently contended that the claim of the assessee under section 271(1)(c) was bonafide one. Merely disallowance has been made for the interest and remuneration to the partners does not mean that the claim of the assessee was not bonafide. The assessee has not submitted any inaccurate particulars nor concealed the particulars of the income. The assessee has duly submitted the explanation and accordingly discharged the onus as entrusted under explanation 1 to section 271(1)(c). 8. We have heard the parties and carefu....
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....result thereof shall, for the purposes of clause (c) of this sub-section be deemed to represent the income in respect of which particulars have been concealed." 10. From the perusal of the aforesaid section, it is apparent that penalty u/s 271(1)(c ) is leviable if the A.O. is satisfied in the course of any proceedings under this Act that any person has concealed the particulars of his income or furnished inaccurate particulars of the income. The penalty proceedings and the assessment proceedings, both are different. Explanation 1 to Section 271(1)(c) states that the amount added or disallowed in computing the total income of the assessee shall be deemed to be the income in respect of which particulars have been concealed. This de....
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.... 642, in which it was held as under: "It is incumbent upon the assessing officer to state whether the penalty was being levied for concealment of particulars of income by the assessee or whether any inaccurate particulars of income had been furnished by the assessee. .................................................................................... 6 .................................................................................... Held, that the penalty order and the order of the Commissioner (Appeals) showed that no clear cut finding had been reached. The Tribunal had failed to appreciate this legal issue. The ratio in CIT V. Manu Engineering Works 132 ITR 306 (Guj) was applicable and the order of penalty....