INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Bogus purchases - Non-specification of charge - Assessee submitted all the details called of by assessee

The only issue in this appeal of assessee was against the order of CIT(A) confirming the levy of penalty under section 271(1)(c) by AO on account of unapproved purchases. For this, the assessee had raised the first issue on jurisdiction that AO had initiated penalty proceedings for both the charges, i.e., concealment of income or for furnishing of inaccurate particulars of income. Assessee had challenged the issue on merits that on bogus purchases/unapproved purchases, the penalty under section 271(1)(c) cannot be levied, where sales are not doubted by AO. Held: AO initiated the penalty proceedings on both the charges that means he was not sure about which charges, the assessee had committed the default. As regards to merits of the case, assessee had filed complete ledger account, purchase bills, delivery challans in respect of purchase transactions made and also payment made by account payee cheque. Assessee could not produce only the purchase party for examination of AO and AO levied penalty only on this count. Therefore, this cannot be the reason for levy of penalty under section 271(1)(c) because AO was unable to prove the concealment of income in this case. Hence, penalty under section 271(1)(c) was deleted.

Followed:CIT v. Samson Perinchery [(2017) 88 Taxman 413 (Bom) : 2017 TaxPub(DT) 0672 (Bom-HC)].