2018 (8) TMI 1356

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.... Act. 1.1 That on the facts and in the circumstances of the case, the Learned CIT(Appeals) erred in not quashing the penalty levied by the Ld. Assistant Director of Income Tax (Ld. ADIT), the same being grossly erroneous, unjustified and bad in law. 1.2 That on the facts and in the circumstances of the case, the penalty under section 271(1)(c) cannot be levied where the appellant has neither concealed particulars of income nor furnished inaccurate particulars of such income. 1.3 That on the facts and in the circumstances of the case, the Ld. CIT (Appeals) erred in holding that bona fides of the appellant have not been established, even though accepting that: (a) mere addition to income, ipso facto, cannot....

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..... 54,44,180/-. Ld.AR submitted that assessee though not in agreement with addition made by Ld.AO, did not file appeal before Ld.CIT (A) to avoid litigation. Ld.AO subsequently initiated penalty proceedings under section 271(1) (c) of the Act for concealment of particulars of income and/or furnishing of inaccurate particulars of such income. He accordingly levied penalty of Rs. 5,44,418/-in the hands of assessee. 2.2. Aggrieved by penalty order passed by Ld.AO assessee preferred appeal before Ld.CIT(A) who confirmed penalty in the hands of assessee. 2.3. Aggrieved by the order of Ld. CIT (A) assessee is in appeal before us now. 3. Ld.AR submitted that assessee had made complete disclosure and entire income under consideration was du....

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....ion 271 (1)(c) of the Act, that the word 'conceal' inherently and per se refers to element of mens rea, albeit the expression 'furnishing of inaccurate particulars' which is much wider in scope. In the present case, Ld.AO levied penalty for concealment. The issue that arises for consideration is whether the conduct of assessee was bona fide. The test of bona fide has to be applied keeping in mind the position as it existed, when the return of income was filed. The issue involved may be based on interpretation and assessee to adopt a legal position which they perceived as most beneficial or suitable. This would not be construed as lack of bona fides as long as the legal position so adopted is not per se contrary to the language of the statut....