INCOME TAX ACT, 1961

Section 271(1)(c) Section 274

Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - No specific charges in penalty notice -

Assessee was director in the company controlled by his sons. AO made disallowance in the hands of said company sons of which booked credit card expenditure of assessee, as income of assessee, as according to AO assessee derived benefit of those expenditure. Also, AO levied penalty under section 271(1)(c) on the ground of concealment. Assessee challenged this.Held: Assessee had disclosed complete details that expenses incurred by assessee through his credit card had been paid by company controlled by sons of assessee were pertaining to that company. Directors of that company examined during the course of search stated that this expenditure belonged to that particular company. The company claimed such expenses expenditure as allowable expenditure in its return of income, which travelled up to the level of CIT(A) who allowed the appeal of that company and deleted substantial part of expenditure holding that they were for the purpose of the business of that company. In all these facts, the assessee had not concealed any particulars of his income and therefore, no penalty could be levied under section 271(1)(c) especially when no specific charge of offence made against assesse in the penalty notice issued under section 274 read with section 271(1)(c).

Supported by:Delhi High Court in case of Sahara India Life Insurances Co. Ltd. 475/2010, dated 2-8-2019.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13

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