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HPCL Mittal Energy Ltd. v. ACIT ( 2018) 168 DTR 1/ 195 TTJ 1 ( TM )(Amritsar)(Trib) www.itatonline.org

S. 271(1)(c):Penalty –Concealment -The AO cannot initiate penalty on the charge of ‘concealment of particulars of income’, but ultimately find the assessee guilty in the penalty order of ‘furnishing inaccurate particulars of income’ (and vice versa). In the same manner, he cannot be uncertain in the penalty order as to concealment or furnishing of inaccurate particulars of income by using slash between the two expressions. Such error is not procedural but goes to the root of the matter and is not saved by S. 292B. The error renders the penalty order unsustainable in law [ S.292B ]

The following point of difference has been referred to me by the Hon’ble President under section 255(4) of the Income-tax Act, 1961 (hereinafter also called as ‘the Act’) :

“Whether, in case where the satisfaction of the AO while initiating penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 is with regard to alleged concealment of income by the assessee, whereas the imposition of the penalty is for ‘concealment/furnishing inaccurate particulars of income’, the levy of penalty is not sustainable?”

The third member held that the question posed is, therefore, answered in affirmative to the effect that where the satisfaction of the AO while initiating penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 is with regard to alleged concealment of income by the assessee, whereas the imposition of the penalty is for ‘concealment/furnishing inaccurate particulars of income’, the levy of penalty is not sustainable.

Accordingly the  Registry of the Tribunal is directed to list these appeals before the Division Bench for passing an order in accordance with the majority view.( ITA Nos.554, 555, 510 & 556/Asr/2014, dt. 07.05.2018)(AY. 2008-09, 2009-10)

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