TaxTMI 
TaxTMI 
2014 (1) TMI 1304
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.... conceal or furnish inaccurate particulars of its income. 2. Whether on the facts and circumstances of the case, the CIT(A) has erred in ignoring that the amount of penalty imposed u/s 271(1)( c) is worked out with reference to the tax sought to be evaded and that furnishing of inaccurate particulars of income is a preclude to tax sought to be evaded. 3. Whether on the facts and circumstances of the case, the CIT(A) has failed to appreciate that by not disclosing its correct tax liability, the assessee has defaulted in terms of provision of section 271(1)( c) of the Income Tax Act, 1961 . 4. The appellant prays for leave to ad, amend, modify or alter any grounds of appeal at the time of before the hearing of the appeal. 2. The b....
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....n consequent, of the re-assessment order, the penalty proceedings u/s 271(1)(c ) were initiated and penalty order was passed on 29.7.2010 imposing a penalty of Rs.51,44,294/- being 100% of tax likely to be evaded. During penalty proceedings, the assessee had submitted that there was no deliberate concealment of income and the increase in amount of tax was only due to possible two views and moreover it was submitted that there was no change in the taxable income and only the rate of tax has been increased in the re-assessment. Reliance in this respect was placed on a number of case laws but the Assessing Officer relying upon the case law of Union of India v. Dharmendra Textile & Processors reported in 306 ITR 277 held that penalty proceeding....
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....he definition of FIS under the treaty etc. and it was possible to have more than one opinion about the issue. Therefore, no penalty could be levied u/s 271(1)( c) in such a case for concealment of particulars of income or furnishing of inaccurate particulars. v) That Assessing Officer erred in calculating tax sought to be evaded equal to the tax liability @ 20% ignoring the fact that appellant had already paid tax @ 15% of gross receipt in its return of income. Therefore, tax ought to be evaded if any was Rs.12,86,073/- and not Rs.51,44,294/-. 4. The Ld CIT(A) after going through the submissions of assessee deleted the penalty by holding as under:- "It is made clear at this juncture that purpose of discussion in the above paragraph....
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....71(1)( c) , a case has been made by the Ld Assessing Officer that the appellant had concealed the particulars of its income. Section 271(1)( c) does not envisage levy of penalty in respect of the issues where there is possibility of more than one interpretation and the additions made by the revenue are on account of difference of opinion about the provisions of the Act or in this case the treaty., Further, the fact that the appellant has not challenged the assessment order passed u/s 147 should not influence our decision at this stage while deciding that whether the appellant was liable for penalty u/s 271(1)( c) of the Act. The liability of the appellant is to be judged solely on the basis of facts of the case. From the discussion in ab....