TaxTMI 
TaxTMI 
2019 (1) TMI 291
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the case. 2. The Ld. CIT(A) erred in deleting the penalty u/s 271(1)(c) of the I.T.Act levied by the Assessing officer for concealment of particulars of income. 3. The Ld. CIT(A) failed to consider the fact that penalty u/s. 271(1}{c) is leviable if AO is satisfied in the course of any proceedings under the IT. Act that any person has concealed particulars of his income or furnished inaccurate particulars of income. From the assessment orders, it is noted that the AO has recorded the satisfaction at para 4 on page 2 of the assessment order, that the assessee concealed the particulars of income. Thus, AO is specific as regards the concealment limb of the penalty in the assessment order. 4. The Ld. CIT(A) erred in deleting the penalty....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of income by declaring the income unearthed during the course of search/post search proceedings, the company concealed particulars of income thereby attracting provisions of section 271(1)(c) of the Act. Hence, penalty proceedings initiated separately." 4. Thereafter, the assessing officer (A.O. for short) observed that after verification, the assessment is completed. Thereafter, the A.O. made the following additions: Total income returned 2,41,14,437 Addition as discussed above: 1 Undisclosed income 105 Acres Sagaraitirth / Temb 2,83,100 2 Undisclosed income - Morave Hindle Village, Sindudurg (correctly it is disallowed u/s.43B on account of service tax) 1,75,386 3 Donations Disallowed 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Learned CIT-A deleted the addition on the ground that the relevant limb of specific charge was not identified in the notice issued u/s.271(1)(c) of the Act. In this regard, the learned CIT-A placed reliance upon several case laws from the Hon'ble jurisdictional High Court and Hon'ble Apex Court. 8. The learned CIT-A in a common order concluded as under: 4.15. In view of the above decisions of the Hon'ble Supreme Court and in view of the decision of the Supreme Court in the case of SSA's Emerald Meadows (referred supra) which confirms the decision of the Hon'ble High Court of Karnataka in the case of CIT Vs Manjunatha Cotton and Ginning Factory (supra), 'inappropriate words' and 'paragraphs' in the standa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t been specified by the A.O. In this regard, we draw support from the of Hon'ble Delhi High Court decision in the case of CIT vs. SAS Pharmaceuticals [2011] 335 ITR 259 (Del). The Hon'ble High Court has expounded that penalty u/s. 271(1)(c) can only be levied if in the course of proceedings, the A.O. is satisfied that there is an concealment or furnishing of inaccurate particulars. The words ''in the course of any proceedings under this Act mean the assessment proceedings'. However, the question 'whether there is concealment or inaccurate particulars' has to be determined with reference to the returned income. Accordingly, in the background of the aforesaid discussion and precedent, the penalty levied with reference to income ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....siness. The assessee had incurred the above expenditure for religious gathering which is directly linked to the business of the assessee and is allowable u/s. 37(1) of the IT. Act, 1961. The amount pertains to the advertisement of the company, but the same has been wrongly classified as donations in the books of assessee. The payment is made by way of cross cheque and the same was towards the propagation of the companies activities in the function to be organized by the respective persons at their religious gatherings. The expenditure was incurred wholly and exclusively for the purpose of business of the assessee as the assessee has to promote the business in the local area in order to get new business deals. Hence, the expenditure ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....R 158 (SC). Hence this penalty is not sustainable. 16. Addition of Rs. 1,75,386/- u/s. 43B: This disallowance was made u/s. 43B on account of remittance of service tax collected to the government account. Here also we find that all the particulars were duly and correctly disclosed. It is not a case of concealment or furnishing of inaccurate particulars of income. Rejection of the assessee's claim as held by the Hon'ble Apex Court in Reliance Petroproducts (P.) Ltd.(supra) will not automatically led to levy of penalty u/s. 271(1)(c). Furthermore, the view that section 43B is not attracted on service tax collected has been upheld by the Hon'ble Delhi High Court decision in the case of CIT vs. Noble & Hewitt (I) P. Ltd. [2008] 305 ITR 3....