TaxTMI 
TaxTMI 
2016 (5) TMI 1252
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.... penalty of Rs. 3,56,166/- imposed by the AO u/s 271(1)(c ) of the Income Tax Act 1961 (the Act) after disallowing the expenditure claimed by the assessee in its normal course of business. 2. In sustaining the said penalty ignoring the settled law that the disallowance of expenditure claimed per se does not by itself leads to the inference that the assessee had concealed the particulars of his income or furnished inaccurate particulars of such income. 3. In sustaining the said penalty ignoring that the assessee is in the business of investment and trading company and in order to maintain its status of a company various expenses are required to be incurred in its normal course of business, even when there is lull in the business." 2....
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....ween various heads of income earned by the assessee. The assessee has income from rent, interest, dividend, long term capital gain and short term capital gain. When the assessee has income from dividend, interest and capital gain, to say that the assessee has not done any business during the year, in our view, is not correct. Be it as it may, there is no furnishing of inaccurate particulars of income of concealment of income in this case. The issue whether the expenditure of Rs. 10,66,545/- is to be allowed under the head 'income from business' or whether it has to be apportioned between different heads of income is a debatable issue. Thus applying the propositions laid down by the Hon'ble Apex Court in the case of CIT vs. Reliance Petro Pr....
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....ions stipulated in Section 271(1)(c) is a sine qua non for initiation of penalty proceedings under Section 271. (e) The existence of such conditions should be discernible from the Assessment Order or order of the Appellate Authority or Revisional Authority. (f) Even if there is no specific finding regarding the existence of the conditions mentioned in Section 271(1)(c), at least the facts set out in Explanation l1(A) and (B) it should be discernible from the said order which would by a legal fiction constitute concealment because of deeming provision. (g) Even if these conditions do not exist in the assessment order passed, at least, a direction to initiate proceedings under Section 271(1)(c) is a sine qua non for the Assessment Of....
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....ny ambiguity. (o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the Assessing Authority. (p) Notice under Section 274 of the Act should specifically state the grounds mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. (q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. (r) The assessee should know the grounds which he has to meet specifically. Otherwise, princi....