| COURT: | Bombay High Court |
| CORAM: | Manish Pitale J, R. K. Deshpande J |
| SECTION(S): | 271(1)(c), 274 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | concelment Penalty, natural justice |
| COUNSEL: | K. P. Dewani |
| DATE: | August 22, 2017 (Date of pronouncement) |
| DATE: | December 5, 2017 (Date of publication) |
| AY: | 1987-88 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 271(1)(c) Penalty: The requirement to obtain previous approval of the IAC is mandatory as it is to safeguard the interests of the assessee against arbitrary exercise of power by the AO. Non-compliance may vitiate the penalty order. However, the requirement in s. 274 that the assessee must be given a reasonable opportunity of being heard cannot be stretched to the extent of framing a specific charge or asking the assessee an explanation in respect of the quantum of penalty proposed to be imposed | |
The provision of Section 271(1)(c)(iii) of the Income Tax does not attract the rule of presumption of mens rea and it cannot be equated with the provision in the Criminal Statute. The penalty is for default in complying with the provision, i.e. of furnishing true and correct particulars of the income in the return. The penalty is imposable for breach of the civil obligation. It is only the reasonable opportunity of being heard in the matter, which is required to be provided to the assessee. The enquiry seems to be of summary in nature, which does not even call for issuance of show cause notice in respect of the quantum of penalty proposed to be imposed. While exercising the discretion in respect of the quantum of penalty, the explanation furnished by the assessee to mitigate the rigour of penalty has to be considered, having regard to the intention of the assessee, if any, to evade the tax, as one of the factors
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