TaxTMI 
TaxTMI 
2015 (5) TMI 1096
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....the Assessing Officer under section 271(1)(c) vide order dated 27.06.2008. 2. Brief fact s relating to the case are that the assessee filed his income-tax return for the impugned assessment year on 26.07.2005 on the income of Rs. 1,02,000/-. Subsequently assessment under section 143(3) was completed at a total income of Rs. 16,51,637/- by making an addition of Rs. 15,49,637/- as undisclosed income. The said amount was deposited by the assessee out of which professional income, which remained undisclosed in the Corporation Bank, Gurgaon Branch between 21.04.2004 to 27.12.2004. The Assessing Officer initiated penalty proceedings under section 271(1)(c) and ultimately imposed penalty on the assessee vide order dated 27.06.2008 by observing ....
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.... material to the computation of the total income of any person under this Act, - (A) Such person fails to offer an explanation or offers an explanation which is found by the AO or the Commissioner (Appeals) or the Commissioner to be false Or (B) Such person offers an explanation which he is not able to substantiate and [fails to prove such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him], Then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section be deemed to represent the income in respect of which particul....
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....nd 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 ration in CIT V. Manu Engineering Works 132 ITR 306 (Guj) was applicable and the order of penalty could not be upheld by the Tribunal. The order was invalid." 6. In the case of Commissioner of Income Tax V. Rajan and Co. 291 ITR 340 (Del), it is held that the provision of section 271 (1) (c) of the Income Tax 1961 would require proper application of mind and recording of at least a bare minimum opinion on the part of Assessing Officer that a case for initiation of penalty proceeding was made as there was concealment of income or that incorrect particulars had been furnished by the asses....
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.... is furnishing of inaccurate particulars of income since it provides a deeming fiction qua concealment of particulars of income only and consequently cannot be extended to a case where charge against the 'Assessee' is furnishing of inaccurate particulars of income. On the other hand, where charge against the 'Assessee' is concealment of particulars of income, the Assessing Officer has to establish either that 'Assessee' has not disclosed the particulars of income under the main provisions or the case of 'Assessee' falls within the scope of the deeming fictions created under the Explanations. For example, the 'Assessee' might not disclose particular sales or dividend income or income from any source. Such instances would fall under the main ....