Search Results For: furnishing inaccurate particulars of income


CIT vs. SSA’s Emerald Meadows (Supreme Court)

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DATE: August 5, 2016 (Date of pronouncement)
DATE: January 11, 2017 (Date of publication)
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S. 271(1)(c): Omission by the AO to explicitly specify in the penalty notice as to whether penalty proceedings are being initiated for furnishing of inaccurate particulars or for concealment of income makes the penalty order liable for cancellation

Whether, omission if assessing officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case?

Posted in All Judgements, Tribunal

Dr. Sarita Milind Davare vs. ACIT (ITAT Mumbai)

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DATE: December 21, 2016 (Date of pronouncement)
DATE: December 30, 2016 (Date of publication)
AY: 2009-10
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CITATION:
S. 271(1)(c): The law in Dilip Shroff 291 ITR 519 (SC) & Kaushalya 216 ITR 660 (Bom) requires a show-cause notice u/s 274 to be issued after due application of mind. The non-specification in the notice as to whether penalty is proposed for concealment or for furnishing of inaccurate particulars reflects non-application of mind and renders it void. The fact that the assessee participated in the penalty proceedings does not save it u/s 292B/292BB

A combined reading of the decision rendered by Hon’ble Bombay High Court in the case of Smt. B Kaushalya and Others (216 ITR 660) and the decision rendered by Hon’ble Supreme Court in the case of Dilip N Shroff (supra) would make it clear that there should be application of mind on the part of the AO at the time of issuing notice. In the case of Lakhdir Lalji (supra), the AO issued notice u/s 274 for concealment of particulars of income but levied penalty for furnishing inaccurate particulars of income. The Hon’ble Gujarat High Court quashed the penalty since the basis for the penalty proceedings disappeared when it was held that there was no suppression of income. The Hon’ble Kerala High Court has struck down the penalty imposed in the case of N.N.Subramania Iyer Vs. Union of India (supra), when there is no indication in the notice for what contravention the petitioner was called upon to show cause why a penalty should not be imposed. In the instant case, the AO did not specify the charge for which penalty proceedings were initiated and further he has issued a notice meant for calling the assessee to furnish the return of income. Hence, in the instant case, the assessing officer did not specify the charge for which the penalty proceedings were initiated and also issued an incorrect notice. Both the acts of the AO, in our view, clearly show that the AO did not apply his mind when he issued notice to the assessee and he was not sure as to what purpose the notice was issued

Posted in All Judgements, Tribunal

Pr. CIT vs. Atotech India Ltd (P&H High Court)

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DATE: November 30, 2016 (Date of pronouncement)
DATE: December 12, 2016 (Date of publication)
AY: 2004-05
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CITATION:
S. 271(1)(c) penalty cannot be levied in a case where the assessee has relied on legal opinion of a professional and there is no tax impact i.e. the loss disallowed in year one is allowed set-off in a later year

The Tribunal noted that the respondent had claimed the set off of its business income of Rs. 1.85 crores against the brought forward business losses of the earlier years on the basis of a legal opinion received from a leading firm of Chartered Accountants. The Tribunal found nothing clandestine in the manner in which the opinion was sought. In any event, even our attention was not invited to anything which suggests any malafides either in the obtaining of the opinion or otherwise. Further, the loss was allowed to be carried forward in the assessment year, namely, assessment year 2002-2003

Posted in All Judgements, High Court

M. G. Contractors Pvt. Ltd vs. DCIT (ITAT Delhi)

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DATE: September 19, 2016 (Date of pronouncement)
DATE: October 8, 2016 (Date of publication)
AY: 2006-07 to 2010-11
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CITATION:
S. 271(1)(c): Penalty cannot be imposed if the AO does not specify whether the penalty is for "concealment of income" or for "furnishing inaccurate particulars". Penalty cannot be imposed in respect of income surrendered by the assessee if the AO does not link the income to incriminating documents

The income is offered by appellant on ad hoc basis without co-relating the amount of year wise disclosure without any corroborating evidence. The above disclosure has been accepted by assessing officer without referring to any incriminating material pertaining to respective years. The assessing officer as well as the 1st appellate authority has also not referred to any material based on which disclosure is made and assessed by the assessing officer. In view of this it is apparent that disclosure is without any material but merely on the statement of appellant. In our view, there may be several reasons for making surrender by an assessee and merely on this basis an inference beyond doubt cannot be drawn that there was concealment of particulars of income or furnishing inaccurate particulars thereof on the part of the assessee towards the surrendered income to attract penal provisions under sec. 271(1)(c) of the Act

Posted in All Judgements, Tribunal

Oxford Softech P.Ltd vs. ITO (ITAT Delhi)

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DATE: April 7, 2016 (Date of pronouncement)
DATE: April 22, 2016 (Date of publication)
AY: 2004-05
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CITATION:
S. 271(1)(c): Income-tax provisions are highly complicated and it is difficult for a layman to understand the same. Even seasoned tax professionals have difficulty in comprehending these provisions. Making a claim for deduction u/s S.80 IA which has numerous conditions is a complicated affair & cannot attract penalty

The provisions under the Income Tax Act are highly complicated and its different for a layman to understand the same. Even seasoned tax professionals have difficulty in comprehending these provisions. Making a claim for deduction under the provisions of S.80 IA of the Act which has numerous The provisions under the Income Tax Act are highly complicated and its different for a layman to understand the same. Even seasoned tax professionals have difficulty in comprehending these provisions. Making a claim for deduction under the provisions of S.80 IA of the Act which has numerous conditions attached, is a complicated affair. It is another matter that the assessing authorities have found that the claim is not admissible. Under these circumstances we hold that it cannot be said that this is a case of furnishing of inaccurate particulars of income

Posted in All Judgements, Tribunal

Sanghavi Savla Commodity Brokers Pvt Ltd vs. ACIT (ITAT Mumbai)

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DATE: December 22, 2015 (Date of pronouncement)
DATE: April 5, 2016 (Date of publication)
AY: 2007-08
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CITATION:
S. 271(1)(c): If show-cause notice does not delete inappropriate words whereby it was not clear as to whether the default is concealing particulars of income or for furnishing inaccurate particulars of income, the levy of penalty is invalid

The Tribunal quashed penalty proceedings initiated u/s 271(1)(c) for AY 2007-08 as penalty show cause notice failed to specify default committed by assessee i.e. the AO did not delete inappropriate words / parts whereby it was not clear as to the default committed by assessee was for concealing particulars of income or for furnishing inaccurate particulars of income

Posted in All Judgements, Tribunal

B. L. International vs. ACIT (ITAT Delhi)

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DATE: March 3, 2016 (Date of pronouncement)
DATE: March 31, 2016 (Date of publication)
AY: 2009-10
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S. 271(1)(c): No penalty leviable on bonafide human error committed while filing return of income

When the assessee was confronted with the depreciation being claimed on the property, the income from which had been returned under the head income from house property, it immediately realized its mistake of computation of total income and agreed for the addition to its total income. The mistake was inadvertent, is evident from the fact that assessee had furnished return of income of Rs. 3,27,79,273/- and, therefore, there was no reason to make a false claim of a petty sum of Rs. 7,87,734/-

Posted in All Judgements, Tribunal

CIT vs. Hiralal Doshi (Bombay High Court)

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DATE: February 9, 2016 (Date of pronouncement)
DATE: February 23, 2016 (Date of publication)
AY: 2006-07
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CITATION:
S. 271(1)(c): Penalty is not leviable on income declared during survey and offered in return. Law laid down in Mak Data 358 ITR 593 (SC) is distinguishable on facts and not universally applicable. A mere change of head of income does not attract penalty

The reliance by the Revenue upon the decision of the Apex Court in Mak Data P. Ltd 358 ITR 593 (SC) to contend that the justification of having deleted and accepted the amount of Rs.1.62 Crores as business income, to buy peace is not available. We find that the facts in that case are completely distinguishable and the observations made therein would not be universally applicable. In that case, a sum of Rs.40.74 lakhs had never been disclosed to the Revenue. During the course of survey, the assessee therein had surrendered that amount with a covering letter that this surrender has been made to avoid litigation and buy peace with the Revenue. In the aforesaid circumstances, the Apex Court held that the words like “to avoid litigation and buy peace” is not sufficient explanation of an assessee’s conduct. It held that the assessee had to offer an explanation for the concealment of income and/or furnishing of inaccurate particulars of income by leading cogent and reliable evidence. The Apex Court further records that in the facts of the case before it the surrender of income was not voluntary but was made only on the account of detection by the Assessing Officer during the course of survey. Further, the Apex Court also records the fact that the survey was conducted more than 10 months before the assessee filed its return of income

Posted in All Judgements, High Court

Mangalam Drugs & Organics Ltd vs. DCIT (ITAT Mumbai)

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DATE: September 24, 2015 (Date of pronouncement)
DATE: February 23, 2016 (Date of publication)
AY: 2004-05
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CITATION:
S. 271(1)(c): Penalty cannot be levied on all issues in a "wholesale" manner. The AO has to give findings for each issue separately. He has to apply mind meticulously and carefully for each issue separately and establish precisely whether there was concealment of income or furnishing of inaccurate particulars of income. The Assessee cannot be fastened with the liability of penalty without there being a clear or specific charge. Fixing a charge in a vague and casual manner is not permitted under the law. Fixing twin charges is also not permitted under the law

It is further noted, from the perusal of penalty order, that the penalty has been levied, on all the additions/disallowances, in a ‘whole sale’ manner. The AO has not given his findings, for levying the penalty, for each issue separately, with respect to the satisfaction of the AO for each of the issue respectively, nor has he given a finding for each issue separately as to whether there was a concealment of income or furnishing of inaccurate particulars of income. The AO has held in the penalty order that various disallowance made by the AO have been confirmed by the Ld CIT(A) and therefore, it is automatically established that the assessee has concealed its income and furnished inaccurate particulars, which has led into concealment of income within the meaning of section 271(1)(c) of the Act. In our considered view, this approach of the AO for levy of penalty is not correct as per law. Penal provisions are quite harsh, these can make the assessee liable for prosecution, as well. Therefore, the AO is obliged, under the law, to make application of his mind meticulously and carefully for each issue separately and to show and establish precisely and specifically whether there was concealment of income or there was furnishing of inaccurate particulars of income on the part of the assessee, at the stage of filing of return of income. The Assessee cannot be fastened with the liability of penalty without there being a clear or specific charge. Fixing a charge in a vague and casual manner is not permitted under the law. Fixing the twin charges is also not permitted under the law. We drive support from the judgment of Hon’ble Gujrat High Court in the case of New Sorathia Engineering Co vs CIT 282 ITR 642 (Guj)

Posted in All Judgements, Tribunal

Safina Hotels Private Limited vs. CIT (Karnataka High Court)

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DATE: January 25, 2016 (Date of pronouncement)
DATE: February 12, 2016 (Date of publication)
AY: 2001-02
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CITATION:
S. 271(1)(c)/ 271(1-B): If the notice is issued without application of mind (by striking out the relevant part in the notice), the penalty proceedings are invalid

It is clear that the notice is issued proposing to levy penalty under Section 271(1)(b) of the Act whereas the order is passed by the Assessing Officer under Section 271(1)(c) of the Act which clearly indicates that there was no application of mind by the Assessing Officer while issuing the notice under Section 274 of the Act. As regards Section 271(1-B) of the Act, it clearly indicates that the assessment order should contain a direction for initiation of proceedings. Merely saying that the penalty proceedings have been initiated would not satisfy the requirement, a direction to initiate proceeding shall be clear and not be ambiguous

Posted in All Judgements, High Court