Case Law Details
DCIT Vs Mahalaxmi Realtors (ITAT Pune)
ITAT held that findings in the assessment proceedings cannot be regarded as conclusive for the purpose of the penalty proceedings. It is also well settled that the criteria and yardstick for the purpose of imposing penalty u/s 271(1)(c) are different than those applied for making or confirming the addition. It is therefore, necessary to re-appreciate and re-consider the matter so as to find out as to whether the addition or disallowance made in quantum proceedings actually represent the concealment on the part of the assessee as envisaged u/s 271(1)(c) of the Act and whether it is a fit case to impose penalty by invoking the said provision. The provision of section 271(1)(c) of the Act stipulated that if the A.O or CIT(A) in the course of proceedings under this Act is satisfied that any person has concealed particulars of his income or furnished inaccurate particulars thereof he may direct that such person shall pay by way of penalty a sum which shall not be less than one but which shall not exceed three times the amount of tax sought to be evaded by a reason of the concealment of particulars of his income. Therefore, it is incumbent upon the revenue authorities to arrive at a satisfaction whether it is a particular case for imposition of penalty u/s 271(1)(c) of the Act. The penalty cannot be imposed in a methodological manner but it can only be imposed if it is required in the facts and circumstances of the case suggesting and confirming any concealment or furnishing of inaccurate particulars of income by the assessee.
In the present case before us, the assessee has declared his income and has filed such declared income in his return of income. Therefore, there is true element of bonafideness in the conduct of the assessee. It cannot be spelt out in such circumstances that he has either concealed his income or has furnished inaccurate particulars of his income. What is to be seen in the instant case is whether declaration made by the assessee was bonafide and whether all the material facts relevant thereto have been furnished and we find that the assessee succeeds on this count since the declared income has been shown in the return of income and therefore the assessee cannot be held liable for penalty u/s 271(1)(c) of the Act. The revenue authorities have not been able to establish that the conduct of the assessee while declaring income and filing such declared income in the return of income was not bonafide or that any specific particulars were concealed or inaccurate particulars were furnished.
Hon‟ble Supreme Court in CIT Vs. Reliance Petro products 322 ITR 158 (SC) has held that no penalty should be imposed when the assessee adopts a bona fide view and has declared all the necessary particulars concerning the income in dispute.
In view of the above, we hold that the order of the CIT(A) in deleting the penalty cannot be faulted with.
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