TaxTMI 
TaxTMI 
2024 (11) TMI 766
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessment proceedings u/s 143(3) of the Act it was seen that in the ABN Amro Bank account of the assessee a cash amounting to Rs. 20 Lakh was deposited. Assessee has been asked to furnish explanation and the Assessing Officer (hereinafter referred to as ld. 'AO') after considering the explanation of the assessee has held that assessee concealed particulars of income of deposited cash in the bank account without satisfactory explanation and hence, penalty proceeding u/s 271(1)(c) of the Act was initiated for deliberately furnishing inaccurate particular of income. The said order of penalty proceeding has been placed by the assessee before the ld. CIT(A) wherein also appeal of the assessee has been dismissed. Being aggrieved and dissatisfied with the impugned order, the present appeal has been preferred. 1.2. The ld. Counsel for the assessee by citing several decisions has submitted that order of the ld. CIT(A) confirmed the impugned penalty stands ab initio void as ld. AO has wrongly imposed the penalty as it is evident from the penalty notice that there was no satisfaction recorded as to under which limb of Section 271(1)(c) of the Act penalty was being sought to be i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f depositing cash in the bank account without offering satisfactory explanation, not showing interest income and showing less rental income. Accordingly, penalty proceeding u/s 271(1)(c) of the Act was initiated, for deliberately furnishing inaccurate particulars of income, at the time of assessment u/s 143(3) of the Act made on 08.03.2013 issuing notice u/s 274 read with Section 271 of the Act on 08.03.2013." 2.1. It is apparent from the order of the ld. AO that the penalty proceeding has been started on two accounts; (i) concealed the particulars of income and (ii) furnishing of inaccurate particulars of income. Now, going over the provisions of Section 271(1)(c) of the Act which is thus: "Explaining the legal provisions it is submitted that sec. 271 (l)(c) of the Act is a penal provision and such a provision has to be strictly construed. Unless the case falls within the four corners of the said provision, penalty cannot be imposed. Sub-sec. (1) of sec. 271 stipulates certain contingencies on the happening whereof the AO or the CIT(A) may direct payment of penalty by the assessee. The fundamentality provided in clause (c) of sec. 271(1) of the Act authorizes imposition of pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....concealment and observed as under: "59. As the provision stands, the penalty proceedings can be initiated on various ground set out therein. If the order passed by the Authority categorically records a finding regarding the existence of any said grounds mentioned therein and then penalty proceedings is initiated, in the notice to be issued under Section 274, they could conveniently refer to the said order which contains the satisfaction of the authority which has passed the order. However, if the existence of the conditions could not be discerned from the said order and if it is a case of relying on deeming provision contained in Explanation 1 or in Explanation 1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned in Section 271 should be made known about the grounds on which they intend imposing penalty on him as the Section 274 makes it clear that assessee has a right to contest such proceedings and should have full opportunity to meet the case of the Department and show that the conditions stipulated in Section 271(l)(c) do not exist as such he is not li....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ined with reference to the information, facts and materials in the hands of the authority imposing the penalty at the time the order was passed and further discovery of facts subsequent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable. 61. The Assessing Officer is empowered under the Act to initiate penalty proceedings once he is satisfied in the course of any proceedings that there is concealment of income or furnishing of inaccurate particulars of total income under clause (c). Concealment, furnishing inaccurate particulars of income are different. Thus the Assessing Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The Apex Court in the case of T. Ashok Pai v. CIT [2007] 292 ITR 11/161 Taxman 340 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of CIT v. Manu Engg. [1980] 122 ITR 306 and the Delhi High Court in the case of CIT v. Virgo Marketing (P.) Ltd. [2008] 171 Taxman 156, has held that levy ....