INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - Leviability -

AO being satisfied with explanation of assessee with respect to disallowance of Foreign Travelling Expenses, therefore, penalty under section 271(1)(c) on account of said addition was dropped. However, AO did not find merit in reply of assessee on another addition of Rs. 81,072 under the head 'Income from other sources'. Accordingly penalty under section 271(1)(c) amounting to Rs. 17,242 was levied. Assessee submitted that AO before levying penalty under section 271(1)(c), did not obtain approval from Addl. CIT in terms of section 274 and he knowingly reduce penalty to Rs. 17,2423 instead of Rs. 25,051 which was the minimum penalty leviable on the concealed income, if any, of Rs. 81,072. Held: It was clear that the minimum pebalty leviable on addition of Rs. 81,072 was Rs. 25,051 therefore, approval from Jt. CIT/Addl. CIT was required as per provisions contained in sub-section (2) of section 274. However, no approval from the Jt. CIT/Addl.CIT was sought, as apparent, penalty of Rs. 17,242 was levied by AO but said penalty was different from penalty under section 271(1)(c) to be levied. There is no provision under section 271(1)(c) to impose penalty less than the 100% of tax sought to be evaded and in the present case, this amount was at Rs. 25,051. In view of all this, penalty levied by AO was not justified.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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