TaxTMI 
TaxTMI 
2017 (3) TMI 76
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....rred on facts and in law in not quashing the penalty order dated 30.03.2014, passed by the assessing officer under section 271 (1) (c) of the Income-tax Act, 1961 for concealment of income whereas the appellant has not concealed the particulars of income and has not furnished any inaccurate particulars of such Income and hence the appellant is not liable to any penalty u/s 271 (1) (c) of the Income Tax Act; 3. That on the facts and circumstances of the case, the CIT(Appeals) erred on facts and in law in not quashing the penalty order even though the learned Assessing Officer had not brought out or proved any concealment of income by the appellant but has just relied on addition being made in Assessment Order as the basis to impose penalty ; 4. That on the facts and circumstances of the case, the CIT(Appeals) erred on facts and in law in not appreciating that whereas the Assessing Officer initiated penalty proceedings on grounds of filing inaccurate particulars of income, penalty was finally imposed for concealment of income. 5. That on the facts and circumstances of the case, the CIT(Appeals) erred on facts and in law in not appreciating that Show Cause Notice issued u/s 274 ....
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....ssessed as bogus but it was matter time when the expense could be claimed. That whereas assessee claimed expense during the year and the Assessing officer wanted to grant claim of expense during next year. That hence in view of settled legal position in such matters of difference of opinion, penalty was clearly not exigible. 12. That the CIT (Appeals) erred on facts and in law in not appreciating that despite certain expenses being disallowed, since appellant has not concealed particulars of income and has not furnished any inaccurate particulars of such .income, absolutely no penalty is imposable; 13. That the CIT (Appeals) erred on facts and in law in not adjudicating on grounds raised before him stating that without prejudice to the other grounds raised, calculation of amount of alleged concealed income of Rs. 4895315/- is incorrect. 14. That the CIT (Appeals) erred on facts and in law in not adjudicating on grounds raised before him stating that without prejudice to the other grounds raised, the calculation of amount of penalty imposed on alleged concealed income is also incorrect. That alleged tax sought to be evaded works out to be Rs. 1512652/-, hence penalty @ 100% wo....
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....ke and to impose the penalty there must be some deliberate default; that in the show cause notice, available at page 73 of the paper book, no specific charges have been made against the assessee and relied upon the judgment of Hon'ble Karnataka High Court in case of CIT vs. Manjunatha Cotton and Ginning Factory & Ors. 359 ITR 565 (Karn). 6. However, on the other hand, ld. DR for the Revenue to repel the argument addressed by the ld. AR contended inter alia that when the addition made against the assessee has been confirmed, the factum of furnishing of inaccurate particulars stands proved; that penalty has been rightly imposed and relied upon the judgment of Hon'ble Delhi High Court in case of CIT vs. Zoom Communication Pvt. Ltd. 327 ITR 510 (Del.). 7. Undisputedly, additions made against the assessee during quantum proceedings have already been confirmed. It is settled principle of law that the penalty cannot be imposed merely on the ground that additions made in the income of the assessee has been confirmed rather to proceed with imposition of penalty u/s 271(1)(c), the AO has to prove that there was concealment of particulars of income or assessee has furnished inaccurate part....
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.... for breach of civil obligations or liabilities. c) Willful concealment is not an essential ingredient for attracting civil liability. d) Existence of conditions 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) Ever 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 1(A) & (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(l)(c) is a sine qua non for the Assessment Officer to initiate the proceedings because of the deeming provision contained in Section 1(B). h) The said deeming provisions are not applicable to the orders passed by the Commissioner of Appeals and the Commissioner. i) The imposition of penalty is not automatic. j) Imposition of penalty ev....
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....ded in the assessment proceedings in so far as "concealment of income" and "furnishing of incorrect particulars" would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proceedings. The assessment or reassessment cannot be declared as invalid in the penalty proceedings." 11. So, following the law laid down by Hon'ble High Court, we are of the considered view that when the assessee has not been specifically made aware of the charges leveled against him as to whether there is a concealment of income or furnishing of inaccurate particulars of income on his part, the penalty u/s 271(1)(c) of the Act is not sustainable. 12. Now, the second question arises for determination in this case is :- "as to whether the assessee has concealed particulars of income or assessee has furnished inaccurate particulars of such income?" 13. For arguments sake, even if it is assumed that assessee has concealed the income by claiming wrong deduction, it does not attract the provisions contai....