2012 (12) TMI 992

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....#39;, for short], is justified, in the given facts and the circumstances of the case or not. 3. The facts leading to levy of penalty are that, the assessee is a co-operative society, engaged in the business of banking and providing credit facilities to its members and public in general. The assessee had been claiming deduction u/s 80P(2) of the Act being eligible for the same has also claimed similar deductions which have not been allowed by the A.O in this year due to change in law which has rendered the assessee ineligible for this deduction. Therefore, penalty proceedings u/s 271(1)(c) were initiated and impugned penalty has been levied on account of concealment of income. This penalty has been deleted by the ld. CIT(A). 4. After heari....

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....ing scheme of imposition of a penalty u/s 271(1)(c) of the Act. We may discuss under what circumstances and in what conditions 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 is no dispute regarding the position of law that under section 271(1)(c) penalty can be levied only if either the act of "concealment of particulars of income" or "furnishing of inaccurate particulars of income" is found to....

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.... 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 document where the assessee can furnish the particulars of his income. When such par....