INCOME TAX ACT, 1961

Section 271(1)(c) Section 274

Penalty under section 271(1)(c) - Leviability - Not wilful concealment of particualrs of income or furnishing of in accurate particular -

Assessee was a contractor and had shown expenditure but subsequently on filing revised return of income the same was shifted to WIP. AO levied penalty under section 271(1)(c) on wilful concealment of income or furnishing inaccurate particulars of income. Further, on current liability TDS was not deducted and itnerest earned by assessee was shown in Capital Account. On such wilful concealment or inaccurate particular of income by assessee penalty under section 271(1)(c) was levied by AO. CIT(A) confirmed the same. Held: Admittedly in the present case, a perusal of the assessment order clearly shows that there was allegation that the assessee had willfully concealed particulars of income. In fact, the disallowance clearly was one in respect of the amount of Rs. 2,35,56,441, which was the claim of expenditure incurred, but it had been moved to work-in-progress and it had been allowed as expenditure in the immediately succeeding year. The genuineness of the expenses has not been questioned nor disputed. The second issue was in regard to current liabilities in the balance sheet in respect of which the TDS had not been deducted, but TDS was deducted in the succeeding year and the payment had been made. Therefore, one cannot say 'concealment of income on this TDS. In respect of addition of Rs. 27,832, it was noticed that the assessee had shown it in its capital account and the assessee had also categorically pointed out in his reply that the mistake was caused on account of the Accountant. Even considering the fact, the assessee had such a large turnover it would be difficult even to assume that the assessee would attempt to conceal or avoid payment of tax on interest income as Rs. 27,832. Also the explanation given by the assessee had not been found to be false nor had been the explanation be disputed. It could not be said that there was concealment of income or furnishing of inaccurate particulars of income, which could give cause for levy of penalty under section 271(1)(c). This being so, the penalty as levied by the AO and confirmed by the CIT(A) under section 271(1)(c) was cancelled.

Followed:Ashok Pai (T) v. CIT (2007) 292 ITR 11 (SC) : 2007 TaxPub(DT) 1251 (SC) and CIT v. Reliance Petro Products (P) Ltd. (2010) 322 ITR 158 (SC) : 2010 TaxPub(DT) 1683 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13

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