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2009 (7) TMI 66
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.... (i) "Whether on the facts and in the circumstances of the case, the levy of penalty u/s 271 (1)(c) of the Income Tax Act 1961 is legal and valid when the Assessing Officer illegally assumed jurisdiction for levy of penalty without recording proper satisfaction about concealing the true and correct particulars of income? (ii) Whether the order of the Tribunal is perverse and vitiated in law in holding that non-production of a/c. books was intentional when in quantum appeal the Tribunal has itself held that ...."the A.O. was not justified in drawing the inference that the assessee did not produce the books of account intentionally (para 5) and the estimated disallowance of expenses was reduced to Rs. 2 lakhs (Para 7). The disallowance o....
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....ion 271 (1)(c) of the Act. The assessee did not appear in response to the notice issued in the penalty proceedings. The A.O. taking due note of the Tribunal's decision levied penalty of Rs.95,000/- on the assessee for having furnished inaccurate particulars of income and having concealed the particulars of income. The penalty was imposed in respect to the addition made in the assessment proceedings by disallowing the expenses to the extent of Rs.3 lakhs, which was subsequently reduced by the Tribunal to Rs.2 lakhs. 5. The assessee preferred an appeal against the imposition of penalty, however, the CIT (Appeals) dismissed the appeal with an observation that the addition made by the A.O. has been subsequently confirmed by the ITAT. The ass....
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....ars. Concealment of income and furnishing inaccurate particulars carries different connotation whereas, concealment refers to deliberate act on the part of the assessee. A mere omission or negligence would not constitute deliberate act of suppressio veri or suggestio falsi. Reliance is placed in the matter of T. Ashok Pai Versus Commissioner of Income Tax, Bangalore1. 7. It was further argued that the Assessing Officer has to arrive to the satisfaction before initiating the penalty proceedings under Section 271 (1)(c) of the Act. Reliance is placed in the matter of Commissioner of Income-Tax Versus Super Metal Re-Rollers. 8. It was further argued that in the matter of Union of India Versus Dharmendra Textile Processors & others, thoug....
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....itted that the Hon'ble Supreme Court in the matter of Dilip N. Shroff Versus Joint Commissioner of Income Tax, Mumbai and another, held that:- "By reason of concealment or furnishing of inaccurate particulars alone, the assessee does not ipso facto become liable for penalty. Imposition of penalty is not automatic. Levy of penalty is not only discretionary in nature but such discretion is required to be exercised on the part of the assessing officer keeping the relevant factors in mind. "Concealment of income" and "furnishing of inaccurate particulars" are different. Both concealment and furnishing inaccurate particulars refer to deliberate act on the part of the assessee. A mere omission or negligence would not constitute a deliberate ac....
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.... with Explanations again came for consideration before the Division Bench in the matter of Dharmendra Textile Processors & others (Supra). Considering the conflict of opinion between the judgment of the Division Bench in the matter of Dilip N. Shroff and another judgment in the matter of Chairman, SEBI Versus Shriram Mutual Fund and another, the matter was referred to the Larger Bench with the following observations:- "8. We are of the view that there is a conflict of opinions between the judgments of the Division Bench of this Court in the case of Dilip N. Shroff v. Jt. CIT (supra) on one hand and on the other hand we have another judgment of this Court in the case of Chairman, SEBI v. Shriram Mutual Fund and Anr. (supra). Secondly, it ....
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....nd 11 AC of the Central Excise Act and Rule 96ZQ (5) of the Central Excise Rules." 13. Overruling the law laid down in the case of Dilip N. Shroff, it was held thus:- "17. It is of significance to note that the conceptual and contextual difference between Section 271(1)(c) and Section 276-C of the IT Act was lost sight of in Dilip Shroff case. 18. The Explanations appended to Section 271(1)(c) of the IT Act entirely indicates the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. The judgment in Dilip N. Shroff case has not considered the effect and relevance of Section 276-C of the IT Act. Object behind enactment of Section 271(1)(c) read with Explanations indicate th....