Question before the High Court was “Whether in the facts and circumstances of the case and in law, the Tribunal was justified in deleting the penalty levied under Section 271(1)(c) of the Act?” In the quantum appeal of the revenue was admitted on following questions of law “ Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in allowing depreciation on assets given on sale and lease back basis when the transactions were purely financial transactions?”. Dismissing the appeal of the revenue the Court held that ,mere using the words that there has concealment of income and / or furnishing inaccurate particulars of income would not in the absence of same being particularized, lead to imposition of penalty. It is only when the specified officer of the Revenue is satisfied that there has been concealment of particulars of income or furnishing inaccurate particulars of income that the occasion to explain the conduct in terms of Explanation I to Section 271(1)(c) of the Act would arise.( CIT v. Zoom Communication Pvt Ltd ( 2015 ) 371 ITR 570 ( Delhi) (HC) is distinguished ) ( ITA No. 1363 of 2015, dt. 04.06.2018)( AY. 1995 -96 , to 1997 -98)
CIT v. L & T Finance Ltd( 2018) 168 DTR 212 (Bom)(HC), www.itatonline.org
S. 271(1)(c) Penalty-Concealment -“sale and lease back”- Quantum of revenue appeal was admitted and pending for final hearing – Merely using the words that there is concealment of income and / or furnishing inaccurate particulars of income is not sufficient. The same should be particularized by the AO with a finding as to what particulars of income has been concealed or what particulars of income are inaccurate. The words ‘concealment’ or giving ‘inaccurate particulars of income’ have to be read strictly before penalty provisions can be invoked. [ S.32]