|CORAM:||Beena Pillai (JM), N. K. Saini (AM)|
|CATCH WORDS:||concealment of income, furnishing inaccurate particulars of income, penalty|
|DATE:||September 7, 2015 (Date of pronouncement)|
|DATE:||October 9, 2015 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 271(1)(c): The deeming provision of Explanation 1 to s. 271(1)(c) applies only to a case of "concealment of income" and not to a case of "furnishing inaccurate particulars of income"|
(i) In the assessment order passed u/s.143(3), the AO initiated penalty for concealing the particulars of income. However, at the time of passing penalty order the AO levied penalty for filing of inaccurate particulars of income under the virtue of Explanation 1 to Section 271(1)(c) of the Act. From a reading of Explanation 1 to Section 271(1)(c) of the Act, it is apparent that, if the AO in the course of assessment proceedings is satisfied that, any person has concealed the particulars of income or furnished inaccurate particulars of such income, then he may levy penalty on the assessee. Thus, there are two different charges i.e. concealment of particulars of income or furnishing of inaccurate particulars of income. The penalty can be imposed only for a specific charge. Furnishing inaccurate particulars of income means, when the assessee has not disclosed the particulars correctly or the particulars disclosed by the assessee are found to be incorrect whereas, concealment of particulars of income means, when the assessee has concealed the income and has not shown the income in its return or in its books of accounts. Explanation 1 is a deeming provision and is applicable when an amount is added or disallowed in computation of total income which is deemed to represent the income in respect of which particulars have been concealed. Explanation 1 cannot be applied in a case where the assessee furnishes inaccurate particulars of income.
(ii) In the present case, the AO initiated penalty proceeding u/s 271(1)(c) on the basis that the assessee has concealed the particulars of income and the penalty ultimately levied on the assessee has been for furnishing inaccurate particulars by observing that the case of the assessee is covered by the Explanation 1 to Section 271(1)(c).
(iii) It is also observed that mistake of the assessee was bonafide which has been corrected by filing revised return before completion of assessment. Merely because there were some discrepancies, it cannot be held that the assessee intended to evade tax. The assessee had rectified the same and had accepted the mistake before the AO. The assessee also chose not to prefer appeal before the first appellate authority, itself shows that the mistakes were not wilfull (Reliance Petro Products 322 ITR 158, Price WaterHouse Coopers Pvt. Ltd. vs. CIT reported in (2012) 348 ITR 306 and DCIT vs. Nepa Limited (2015) 58 Taxmann.com 137 followed)