TaxTMI 
TaxTMI 
2017 (6) TMI 397
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....ling expenses and as such there was no concealment of particulars of income on which penalty could be levied. iii) That the foreign tours were under taken to explore the possibilities of export to those countries and in fact export had been made to Nepal in the subsequent year. 2. That in any case confirmation of penalty is against, the law and facts of the case. 3. That the Appellant craves leave for permission to add, amend or alter any ground of appeal at the time of hearing." 3. The only issue in the present appeal relates to levy of penalty imposed under section 271(1)(c) of the Act amounting to Rs. 1,90,867/- on account of disallowance of foreign travelling expenses amounting to Rs. 5,21,600/-. 4. Brief facts relevant to the issue are that in the assessment order passed for the impugned year, the Assessing Officer disallowed foreign travelling expenses amounting to Rs. 5,21,600/-. Thereafter penalty u/s 271(1)(c) of the Act, was initiated thereon. During the course of the penalty proceedings the assessee vide its reply dated 7.12.2012 stated that all the details relating to foreign travelling were filed during the course of assessment proceedings and details were par....
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....of the invoice evidencing export of goods to Nepal. The Ld. CIT (Appeals) after considering the assessee's submissions upheld the levy of penalty stating that the assessee had clearly failed to prove the genuineness of the foreign traveling expenses by not producing evidence to prove the business purpose for the same. The Ld. CIT (Appeals) observed that the disallowance had been upheld by the I.T.A.T. for the aforesaid reason. The Ld. CIT (Appeals) further held that though the findings in quantum proceedings were not conclusive, they do have a bearing on the penalty proceedings. The onus to prove an expenditure lies solely on the person making the claim and since no evidence was produced by the assessee in the present case, it was clearly a case of making false claim of expenditure. The Ld. CIT (Appeals) thereafter held that the present case was clearly covered under Explanation-1 to section 271(1)(c) of the Act and, therefore, upheld the levy of penalty. The relevant findings of the Ld. CIT (Appeals) at para 2.2 of the order are as under: "2.2 I have considered the facts of the case, the basis of imposition of penalty and the submissions made during the course of the penalty as w....
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....unt of foreign travelling undertaken had been duly disclosed and it was merely on the basis of difference of opinion that the disallowance had been made. The Ld. counsel for the assessee argued that no penalty was leviable in such circumstances and relied upon the decision of the Hon'ble Apex Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd., 322 ITR 158, the decision of the Hon'ble Punjab & Haryana High Court in the case of Pr. CIT Vs. Torque Pharmaceuticals P. Ltd., 389 ITR 46 and on the decision of the Himachal Pradesh High Court in the case of H.P. State Forest Corporation Ltd. Vs. DCIT reported at 340 ITR 204. 9. The Ld. DR, on the other hand, relied upon the order of the CIT (Appeals) and stated that since the assessee had not proved the expense had been incurred for business purpose, its claim had remained unsubstantiated warranting the levy of penalty under section 271(1)(c) of the Act. 10. We have heard the contentions of both the parties on this aspect and have also gone through the orders of the authorities below as also the documents referred to before us. We find that the Assessing Officer had disallowed foreign traveling expenditure amounting to ....
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....to have concealed particulars of its income. In the present case, we find that vis-à-vis the balance expenditure no explanation has been given by the assessee for claiming that it has been incurred for the purpose of business, except that all bills have been provided, which we find does not help the assessee in establishing the fact as claimed by it. Also the assessee cannot shift the onus on the Revenue to prove that the claim was incorrect since it has failed to discharge the initial onus placed upon it of proving its claim as such and the bonafide of the said claim. In view of the same, we find that for the rest of the expenditure, Explanation-1(A)/(B) to section 271(1)(c) is attracted and to the extent of expenditure incurred thereon the assessee is liable to penalty under section 271(1)(c) of the Act. 11. Alternatively the Ld. counsel for assessee also argued before us that the notice issued to it did not specify whether the provision for levy of penalty was initiated for concealment of income or furnishing of inaccurate particulars of income. Copy of the notice was placed on record indicating that the relevant column had not been struck off. The Ld. counsel for the as....
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.... as such he is not liable to pay penalty. The practice of the Department sending a printed farm where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under Section 274 should satisfy the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended if the show cause notice is vague. On the basis of such proceedings, no penalty could be imposed on the assessee. 60. Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may be overlapping of the two offences but in such cases the initiation of the penalty proceedings also must be for both the offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or finding him guilty for either the one or t....