To impose Penalty u/s. 271(1)(c) receipt of amount in dispute must constitutes income of assessee
It is now settled law that in order to sustain a penalty under section 271(1)(c) the department must establish that the receipt of the amount in dispute constitutes income of the assessee and part from the falsity of the explanation given by the assessee, the department must have before it cogent material or evidence from which it can be inferred that the assessee has consciously concealed the particulars of his income or has deliberately furnished inaccurate particulars in respect of such income. It is also settled law that the fining given in the assessment proceedings for determining or computing the tax cannot by itself be said to be conclusive in penalty proceedings though it may be good evidence which may be considered along with the other evidence in the penalty proceedings.
These principles stood the test of time in examining scope of penalty u/s 271(1)(c). What we noticed in this case is that the A.O. was satisfied about the explanation given by the assessee as bonafide in respect of two assessment years but levied the penalty with reference to this assessment year. Since the explanation is common and the fact that bank account was came to the knowledge after the search, there cannot be different treatment given to the same assessee in different assessment years on the same set of facts. Therefore, we are of the opinion that the A.O. should have dropped the penalty proceedings in this assessment year as well. Consequently, we are of the opinion that the explanation offered by the assessee is to be considered as bonafide explanation and accordingly in view of Explanation 1 to sec 271(1)(c), penalty proceedings are not attracted. The penalty is therefore, cancelled. In the result, appeal of the assessee is allowed."
INCOME TAX APPELLATE TRIBUNAL, MUMBAI
ITA No. 3549/Mum/2011 – Assessment Year 2001-02
Haren P Choksey Vs. DCIT
It is now settled law that in order to sustain a penalty under section 271(1)(c) the department must establish that the receipt of the amount in dispute constitutes income of the assessee and part from the falsity of the explanation given by the assessee, the department must have before it cogent material or evidence from which it can be inferred that the assessee has consciously concealed the particulars of his income or has deliberately furnished inaccurate particulars in respect of such income. It is also settled law that the fining given in the assessment proceedings for determining or computing the tax cannot by itself be said to be conclusive in penalty proceedings though it may be good evidence which may be considered along with the other evidence in the penalty proceedings.
These principles stood the test of time in examining scope of penalty u/s 271(1)(c). What we noticed in this case is that the A.O. was satisfied about the explanation given by the assessee as bonafide in respect of two assessment years but levied the penalty with reference to this assessment year. Since the explanation is common and the fact that bank account was came to the knowledge after the search, there cannot be different treatment given to the same assessee in different assessment years on the same set of facts. Therefore, we are of the opinion that the A.O. should have dropped the penalty proceedings in this assessment year as well. Consequently, we are of the opinion that the explanation offered by the assessee is to be considered as bonafide explanation and accordingly in view of Explanation 1 to sec 271(1)(c), penalty proceedings are not attracted. The penalty is therefore, cancelled. In the result, appeal of the assessee is allowed."
INCOME TAX APPELLATE TRIBUNAL, MUMBAI
ITA No. 3549/Mum/2011 – Assessment Year 2001-02
Haren P Choksey Vs. DCIT
No comments:
Post a Comment