2023 (10) TMI 303

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....ssee filed its return declaring total income at Rs. 1,01,93,260/-. The AO, while finalising the assessment u/s. 143(3), made disallowance of Rs. 10,97,428/- towards certain expenses claimed in the Profit and loss account on the ground that they ought to have been capitalized. He finalised the penalty order without specifically clarifying as to whether the penalty was levied for furnishing of inaccurate particulars of income or for concealment of particulars of income. This issue was raised before the ld. CIT(A) as well urging to delete the penalty because the AO neither at the time of recording of satisfaction nor in the penalty order demonstrated as to whether it was a case of furnishing of inaccurate particulars of income or concealment o....

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....iculars of income leading to addition results in enhancement of income. Both the limbs - (i) furnishing of inaccurate particulars of income and (ii) concealment of particulars of income - are separate and distinct from each other. Whereas the concealment limb refers to additions towards items of income not shown by the assessee; and the limb of furnishing of inaccurate particulars of income would, inter alia, refer to disallowance of expenses claimed by the assessee as deductible. Additions made under both the limbs eventually give a foundation for imposition of penalty u/s. 271(1)(c), subject to the fulfilment of requisite conditions of the section. One cannot say that disallowance of expenses has resulted into `concealment of income for f....