INCOME TAX ACT, 1961

Section 271(1)(c) Section 260A

Appeal (High Court) - Maintainability - Substantial question of law - Assessee taking plea of penalty notice under section 271(1)(c) issued under both heads

Assessee not having acted bona fidely in not offering of capital gains to tax challenged levy of penalty under section 271(1)(c) by way of filing appeal under section 260A on the ground of defect in penalty notice, i.e., non-mention of specific charge of offence in penalty notice. Also, assessee took plea of poor financial condition of the company.Held: If factual foundation for a case has been laid and legal consequences of the same having been examined, the examination of such legal consequences would be a pure question of law. Assessee understood the notice to be under both heads, namely, furnishing of inaccurate particulars and concealment of income, which was evident from assessee's reply to Show Cause Notice, there was no substantial question of law arising from such contention. Further, as per settled legal position penalty could not be cancelled on the mere ground that return of income and assessed income was a loss. Accordingly, assessee could not take plea of poor financial condition. Accordingly, assessee having not acted bona fidely, penalty order was a reasoned order.

Relied:UOI v. Dharmendra Textile Processors (2008) 306 ITR 277 (SC) : 2008 TaxPub(DT) 2320 (SC) and N.G. Technologies Ltd.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2012-13

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