INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - Leviability -

Assessee made deposits in cash amounting to Rs. 51 lakhs which was not disclosed in IT Return. On question by AO, assessee submitted that impugned deposits represented business receipts. As per assessee, he was engaged in business activity of trading for all types of bras part item, stove parts, hardware items. The assessee also claimed that he had not maintained any books of acounts for such business transactions. Accordingly, he offered income of Rs. 24.14 lakhs being 8% of Rs. 51 lakhs under section 44AD. Accordingly, AO framed assessment after making the addition of Rs. 4.14 lakhs to total income of the assessee and also levied penalty under section 271(1)(c). Held: Any addition/disallowances made during quantum proceedings could not automatically justify levy of the penalty undr section 271(1)(c). Besides element of income added in quantum proceedings, there must be some material/circumtantial evidences leading to the reasonable conclusion that there was conscious concealment or the act of furnishing of inaccurate particulars on part of assessee. In the instant case, business income was charged to tax on presumption basis under section 44AD. Thus it was transpired that there was no deliberate act on part of assessee not to disclose business receipts in his IT Return. AO had also not brought any material suggesting that assessee deliberately furnished inaccurate particulars of income. Accordingy, AO was not justified in levying penalty under section 271(1)(c).

Supported by:ITO v. Bombay Wala Readymade Stores (2015) 55 TAxmann.com 1258 (Guj) : 2015 TaxPub(DT0 2851 (Guj-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15

APPELLATE TRIBUNAL RULES, 1963

Section 34(5)(c)

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