INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - Initiation of penalty proceedings for one breach while imposition of penalty for the other -

AO initiated penalty proceedings under section 271(1)(c) against quantum addition in quantum assessment order on the ground of furnishing of inaccurate particulars of income, whereas penalty had been finally been levied for concealment of income. Assessee challenged this. Held: Concealment of income and furnishing of inaccurate particulars of income in section 271(1)(c), carry different meanings/connotations. Therefore, satisfaction of AO with regard to only one of the two breaches mentioned under section 271(1)(c) for initiation of penalty proceedings could not warrant/permit penalty being imposed for the other breach. This is more so, as an assessee would respond to the ground on which penalty had been initiated/notice issued. It must, therefore, follow that order imposing penalty had to be made only on the ground of which penalty proceeding had been initiated, and it cannot be on a fresh ground of which the assessee had no notice.

Relied:CIT v. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565 (Kar) : 2014 TaxPub(DT) 202 (Karn-HC) : 35 taxmann.com 250.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2010-11

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