INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Assessment framed under section 158BC after making certain addition - There was no concept of concealment/furnishing of inaccurate particular of income under the provisions of section 158BFA(2) -

Assessee was engaged in business of construction, finance and film distribution. There was a search conducted on assessee under section 132. As a result of search certain documents of incriminating nature were found and accordingly the assessment was framed under section 158BC after making certain addition. AO also initiated the penalty proceedings under section 158BFA(2) by issuing notice. AO finally passed the order under section 271(1)(c) levying the penalty on account of concealment/furnishing of inaccurate particular of income. Held: Reading of provision under section 158BFA (2) shows that it was applicable for the specified years in the case of search carried our under section 132 on or after first day of June 2007, but before the first day of July 2012. In case of search proceedings it was compulsory to make assessment in particular manner under the different provision of the sections of the Act. Similarly, penalty was levied with respect to search proceedings under a different provision. AO levied penalty under section 271(1)(c) by observing that assessee had concealed/furnished inaccurate particular of income whereas there was no concept of concealment/furnishing of inaccurate particular of income under the provisions of section 158BFA(2). Thus, penalty levied under section 271(1)(c) was not sustainable.

Relied:National Thermal Power Company Limited v. CIT 1996 229 ITR 383 : 1998 TaxPub(DT) 0342 (SC) and Rajendra Kumar Jain v. DCIT [ITA No. 80 & 81/VIZ/2017, dt. 11-8-2017]

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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