No penalty unless there was conscious concealment or furnishing of inaccurate particulars of income.

R.S. Tradelink Pvt. Ltd. Vs ACIT (ITAT Surat)

No penalty unless there was conscious concealment or furnishing of inaccurate particulars of income

Conclusion: Penalty under section 271(1)(c) was not leviable as AO was not certain that for which limb he wanted to initiate penalty proceedings, that is, for concealment of income or for furnishing inaccurate particulars of income. AO initiated penalty proceedings on one footing and concluded on other footing, therefore, the basis of levy of penalty itself was not correct.

Held: During the scrutiny assessment, AO had made addition, on account of Long Term Capital Gain. AO in assessment order, had stated that penalty proceedings under section 274 r.w.s 271(1)(c) should be initiated for furnishing inaccurate particulars of income and concealment of income. However,  AO  had initiated penalty proceedings for concealment of income. Assessee challenged penalty levied by AO. It was held that AO had initiated the penalty proceedings on one footing and concluded on other footing. AO was not certain that for which limb he wanted to initiate penalty proceedings, that is, for concealment of income or for furnishing inaccurate particulars of income. Therefore, the basis of levy of penalty itself was not correct. Assessee company sold the land to Ambuja Cement for a certain consideration and out of the said receipt the bank loans were to be paid by the company. When this fact (that the said amount was not disclosed in the original return by way of capital gain) was drawn to the attention of the Director, he immediately and voluntarily offered the long term capital gain in the hand of the company by revising the return of income. The amount received from the transferee company of M/s Ambuja Cement had been shown by assessee-company under the head loan and advances, hence, there was no conscious concealment of income. So, where the circumstances of a case establish that the mistake was accidental and inadvertent and there was no material at all to justify any want of bona fide or any gross neglect, imposition of penalty was not justified.[ Mahadeshwara Movies 144 ITR 127 (kar) ]. Therefore, in the assessee’s case the penalty was not leviable unless it was shown that there was a conscious concealment or furnishing of inaccurate particulars of income.

FULL TEXT OF THE ORDER OF ITAT SURAT

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