There cannot be any dispute to the preposition that the penalty is leviable under Section 271(1) (c) when any person has concealed the particulars of his income or furnished inaccurate particulars of such income. The present is not a case of concealment of particulars of any income of the assessee. At best, the case could have proceeded on the ground that assessee “furnished inaccurate particulars of such income”.
From the order passed by the Commissioner of Income Tax (Appeals)-II as well as the Tribunal, it is clear that the assessee has shown in his initial return filed on 31.10.1991, twenty entries showing outstanding as on 31.03.1991 against the different parties. The assessee was asked to bring confirmation of the aforesaid outstanding amount. The Assessing Officer doubted the genuineness of the transaction. The Assessing Officer in fact issued notice to 20 such parties against whom outstanding were shown. The assessee could bring confirmation with regard to 15 transaction but with regard to 5 whose parties became untraceable, the revised return was filed deleting the said entries.
The findings recorded by the Tribunal as contained in Paragraph No. 3.1 are to the following effect:-
3.1-………… The AO issued notices to about 20 parties out of that only five were picked up, where the assessee could not obtain confirmation letter for the reasons that those parties were not available at the time of requirement of the AO. Therefore, the assess surrendered the credits appearing in the name of those five persons to by peace and to cooperative with the department. In view of these submissions, it was pleaded that the CIT(A) has rightly cancelled the penalty.
The assessee has come with the explanation for filing a revised return by deleting outstanding entries regarding aforesaid five traders. The reason was noticed by the Tribunal that the dealers being belonging to particular community had left the Town during riots due to Ram Janma Bhumi and Babari Masjid dispute or otherwise refused to give confirmation letter. The mere fact that the assessee could not obtain confirmation letter of the said outstanding entries from only five traders out of 15 in no manner can be said that in his return filed on 31.10.1991, he mentioned inaccurate particulars. In the revised return those entries were deleted by the assessee on account of he having not been able to filed requisite confirmation letters or proof. In the said circumstances, it cannot be said that he filed any inaccurate particulars on which penalty could have been imposed under Section 271 (1) (c).