INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Concealment of Income or furishing of inaccurate particulars - Debatable issue -

Assessee engaged in real estate development filed return of income for assessment year 2009-10 and declared total income of Rs. 2,62,64,870. AO completed assessment under section 143(3) determining total income at Rs. 9,19,780. The difference between returned income and assessed income had mainly arisen due to AO estimating assessee's profit from building project 'S'. AO made an addition of Rs. 6,31,61,224 whereas a larger amount of Rs. 6,45,83,973 was shown by assessee for assessment year 2011-12 which, according to assessee, was the final year of project 'S'. As regards said difference, AO levied penalty under section 271(1)(c). Assessee challenged this. Held: There was difference of opinion as respects allocation of income of the project amongst different years. Hence, two views were possible in assessee's case as addition made by AO was debatable in nature. Assessee stated primary facts of case truly and fully, and it could not be said there was concealment of income or furnishing of inaccurate particulars of income and, therefore, no penalty was leviable under section 271(1)(c).

Followed:CIT v. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC) : 2010 TaxPub(DT) 1683 (SC)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10

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