TaxTMI 
TaxTMI 
2022 (9) TMI 655
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....nalty of Rs. 9,27,000/- u/s. 271(1) (C) without clearly specifying the charge i.e. Concealment of income "or furnishing of inaccurate particulars. 5. That the Appellant craves leave to add/alter any/all grounds of appeal before or at the time of hearing of the Appeal. 6. That the Ld. Assessing Officer has erred on facts and in law in levying the penalty of Rs. 9,27,000/- u/s. 271(1) (C) despite there is no concealment of income by the appellant nor assessee furnished in inaccurate particulars of income by the appellant." 3. The ld. Counsel of the assessee submitted that the ld.CIT(A) has erred in upholding the penalty of Rs.9,27,000/- imposed by the AO u/s 271(1)(c) of the Act without looking into facts and circumstances of the case and relying on irrelevant judicial pronouncements. The ld. Counsel also submitted that the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence without clearly specifying the charge i.e., concealment of income or furnishing of inaccurate particulars of income. Therefore, the impugned penalty may kindly be deleted. The ld. Counsel also placed reliance on the following ....
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....ition because he has added the specific amount after giving sufficient opportunity to the appellant assessee. He further submitted that it is not a case where somebody genuinely claimed an expenditure which was disallowed by the AO because of difference in opinion and the appellant has ploughed back its unaccounted money, therefore, the mala fide intention cannot be ruled out. Thus, this being a fit case for imposition of penalty u/s 271(1)(c) of the Act, penalty may kindly be confirmed. 6. Placing rejoinder to the above, the ld. Counsel of the assessee submitted that in the case of Pfizer Ltd. (supra), the coordinate Bench of the Tribunal clearly held that there are two essential conditions for invoking clause (B) of Explanation 1 to section 271(1)(c) of the Act and both the conditions must be cumulatively satisfied so as to bring a case within the mischief of this clause. The ld. Counsel submitted that it would be relevant to take note that conjunction 'and' has been used by the legislature between the two essential conditions and if only one condition is satisfied and the other is not, the penalty would not follow. The ld. Counsel submitted that if the person offers an explanat....
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....ision of clause (c) of section 271(1) covers the cases of concealment of income and furnishing of inaccurate particulars of such income in a general way. Apart from that, there have been enshrined certain Explanations, some of which contain the cases of deemed concealment. These include the situations in which there may not be concealment etc. within the parameters of main provision but by the legal fiction contained in such Explanations, it is deemed as concealment of income. It is nobody's case that any Explanation, other than Expl. 1, applies to the facts of the instant case. Explanation 1, which, therefore, assumes significance, is reproduced as under :- "Explanation 1. - Where in respect of any facts 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 [Assessing] Officer 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 that such explanation is bona fide and that all the facts relating to the same and material to the computation o....
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....re disclosed by him. Here it is relevant to mention that the above bracketed portion of clause (B) of the Expl. was inserted en bloc by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986 w.e.f. 10.09.1986. On reading of the clause (B) of the Expl. 1,it is clear that in order to encompass a case within its purview, the following two conditions must be satisfied:- (i) assessee offers explanation which he is not able to substantiate; and (ii) he fails to prove that such explanation is bona fide; and all the facts relating to the same have been disclosed by him. 14. At this juncture it would be relevant to take note that conjunction "and" has been used by the legislature between these two essential conditions of clause (B) of Explanation (1) to section 271(1)(c). It shows that both the above referred conditions must be cumulatively satisfied so as to bring a case within the mischief of this clause. If only one condition is satisfied and the other is not, the penalty would not follow. In other words, if the person offers an explanation which he is not able to substantiate [being condition(i) above] but succeeds in proving that such explanation is bona fide and t....