Levy of penalty under section 271(1)(c) of Income-tax Act

No penalty is imposable in respect of vexed legal issues which are debatable or on which two views/opinions are possible. For imposing penalty under s. 271(1)(c), the twin conditions of furnishing of inaccurate particulars or concealment of income has to be satisfied. Full Article

Even if there is no concealment of income or furnishing of inaccurate particulars, but on the basis thereof the claim, which is made, is ex facie bogus, it may still attract penalty provision. Full Article

SUMMARY OF CASE LAW Under Explanation 1 to section 271(1)(c), an assessee would be deemed to have concealed the particulars of his income if, in respect of facts material to the computation of his income, he fails to offer an explanation or offers a false explanation or an explanation which he is not able to [...] Full Article

SUMMARY OF CASE LAW Even post Dharmendra Textile Processors’ judgment by the Supreme Court, merely because an addition is made to the income declared by the assessee, penalty under section 271(1)(c) cannot be imposed; Supreme Court’s judgment in the case of Dharmendra Textile Processor’s case does not bring about any radical change in the scheme [...] Full Article

SUMMARY OF CASE LAW Section 271(1)(c) can be invoked for imposing a penalty on an assessee, only if there is a “concealment of particulars of income” or alternatively if an assessee furnishes “incorrect particulars of income. CASE LAW DETAILS Decided by: HIGH COURT OF PUNJAB AND HARYANA, In The case of:CIT v Haryana Warehousing Corporation, Appeal No.: [...] Full Article

BUDGET 2009 has proposed to substitute existing explanation 5A below section 271(1)(c ) with new explanation 5A with retrospective effect from 01/06/2007. This new section provides that if in the course of search an assessee is found to be the owner of any money, bullion, jewllery or other valuable articles or thing; and the assessee [...] Full Article

SUMMARY OF CASE LAW Mere omission of the surrendered income from the return of an item of receipt does neither amount to concealment nor furnishing of inaccurate particulars of income; mere asking of a question or simply raising of an enquiry about any loan/gift does not tantamount to detection of concealment. Full Article

CASE LAW DETAILS Decided by:. ITAT, `D’ BENCH, MUMBAI  In The case of: DSA Engineers (Bombay) v  ITO  Appeal No. : ITA NO. 5354/Mum/2007 Decided on: March 12, 2009 SUMMARY OF CASE LAW When the assessee continues to reflect or record the liabilities as still payable to the creditors and he decides to not to [...] Full Article