section 271(1)(c)

Football & Income Tax- Penalty, in both, is Hefty

Income Tax - Arjuna, while playing on the Football Ground if, a player pushes other players or creates any obstruction then the referee whistles and show a Yellow Card. Yellow Card represents a mild penalty. If you look at Income Tax, the taxpayers are intimated by a prior notice and thereafter a penalty is levied...

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Validity of Penalty Notice- Continuing Saga

Income Tax - The Bombay High Court has in its order dated 12th June, 2020 in the case of Ventura Textiles Ltd (ITA No.958/2017) has given a fresh perspective to the controversy of validity of penalty notice under section 271(1)(c). In the past the courts have held that if the show cause notice proposing penalty under section 271(1)(c) do not clearly s...

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Prosecutions and Punishment under Income Tax Act, 1961

Income Tax - Apart from penalty for various defaults, the Income-tax Act also contains provisions for launching prosecution proceedings against the taxpayers for various offences. In this part you can gain knowledge about the various provisions relating to prosecution which can be launched under the Income-tax Act....

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Income Tax Offences liable to prosecution

Income Tax - Apart from levy of penalty for various defaults by the taxpayer, the Income-tax Law also contains provisions for launching prosecution for offences committed by the taxpayer. In this part you can gain knowledge about offences in respect of which prosecutions can be launched under the Income-tax Law....

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Power of Commissioner to Reduce or Waive Income Tax Penalty

Income Tax - In the tutorial on Penalties Under the Income-tax Act, we discussed various penalties imposable under the Income-tax Act in respect of various defaults. Apart from enacting penalty provisions...

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Easwar Committee Recommends Non-Levy Of Penalty in certain circumstances

Income Tax - The Committee recommends that the scope of Section 273B should be suitably enlarged to provide that penalty for concealment of income or furnishing inaccurate particulars thereof will not be imposed where any addition or disallowance is made without any evidence or in a routine manner or on estimate and in cases where the Assessing Office...

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ITAT remands back the issue of Section 271(1)(c) Penalty to AO

Fox Mandal & Co. Vs ACIT (ITAT Delhi) - Fox Mandal & Co. Vs ACIT (ITAT Delhi) It is an admitted fact that despite number of opportunities granted by the Ld. CIT(A), there was no compliance from the side of the assessee for which the Ld. CIT(A) was constrained to decide the appeal exparte and thereafter sustained the penalty levied by ...

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No penalty if no deliberate attempt to evade payment of taxes

Advent Computer Services Ltd. Vs ACIT (ITAT Chennai) - Advent Computer Services Ltd. Vs ACIT (ITAT Chennai)  It is an admitted fact that assessee has not reported capital gain derived from transfer of equity shares in pursuant to the direction of the Hon’ble High Court of Madras for amalgamation of M/s. i Theories Business Factory India Pvt. Ltd., wi...

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No section 36(1)(iii) disallowance unless Direct Nexus between Borrowed Funds & Capital Withdrawals

Lypsa Diamonds Vs ITO (ITAT Mumbai) - The issue under consideration is whether disallowance u/s 36(1)(iii) made by AO forming an opinion that interest bearing funds were withdrawn from the firm being capital withdrawn by the partners and interest free advances is justified in law?...

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Once quantum addition deleted, penalty u/s. 271(1)(c) has no legs to stand

ACIT Vs Thermax Limited. (ITAT Pune) - ACIT Vs Thermax Limited (ITAT Pune) Revenue has not doubted the genuinity of the return filed by the assessee and has not said that the particular of expenses claimed in the return were not correct. The expenses were claimed and quantum additions have been upheld by the Tribunal. However, in the sep...

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Mere Rejection of section 35D claim not amounts to Concealment of Income

DCIT Vs. ICICI Bank Ltd. (ITAT Mumbai) - DCIT Vs. ICICI Bank Ltd. (ITAT Mumbai) The issue under consideration is whether the CIT(A) is correct in deleting the penalty levied u/s 271(1)(c) on the disallowance of expenses made u/s.35D? ITAT states that, the assessee claimed deduction of preliminary expenses u/s 35D which was rejected by Ld.A...

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Immunity under Section 270AA of Income-tax Act, 1961- CBDT Clarifies

Circular No 5/2018-Income Tax - (16/08/2018) - Section 270AA of the Income-tax Act, 1961 (the Act) inter alia provides that w.e.f. 1 st April, 2017, the Assessing Officer, on an application made by an assessee, may grant immunity from imposition of penalty under section 270A (not being penalty for misreporting) and initiation of proceedings unde...

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Recent Posts in "section 271(1)(c)"

ITAT remands back the issue of Section 271(1)(c) Penalty to AO

Fox Mandal & Co. Vs ACIT (ITAT Delhi)

Fox Mandal & Co. Vs ACIT (ITAT Delhi) It is an admitted fact that despite number of opportunities granted by the Ld. CIT(A), there was no compliance from the side of the assessee for which the Ld. CIT(A) was constrained to decide the appeal exparte and thereafter sustained the penalty levied by the AO u/s. […]...

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No penalty if no deliberate attempt to evade payment of taxes

Advent Computer Services Ltd. Vs ACIT (ITAT Chennai)

Advent Computer Services Ltd. Vs ACIT (ITAT Chennai)  It is an admitted fact that assessee has not reported capital gain derived from transfer of equity shares in pursuant to the direction of the Hon’ble High Court of Madras for amalgamation of M/s. i Theories Business Factory India Pvt. Ltd., with the assessee company, even though [&h...

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No section 36(1)(iii) disallowance unless Direct Nexus between Borrowed Funds & Capital Withdrawals

Lypsa Diamonds Vs ITO (ITAT Mumbai)

The issue under consideration is whether disallowance u/s 36(1)(iii) made by AO forming an opinion that interest bearing funds were withdrawn from the firm being capital withdrawn by the partners and interest free advances is justified in law?...

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Football & Income Tax- Penalty, in both, is Hefty

Arjuna, while playing on the Football Ground if, a player pushes other players or creates any obstruction then the referee whistles and show a Yellow Card. Yellow Card represents a mild penalty. If you look at Income Tax, the taxpayers are intimated by a prior notice and thereafter a penalty is levied...

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Posted Under: Income Tax |

Once quantum addition deleted, penalty u/s. 271(1)(c) has no legs to stand

ACIT Vs Thermax Limited. (ITAT Pune)

ACIT Vs Thermax Limited (ITAT Pune) Revenue has not doubted the genuinity of the return filed by the assessee and has not said that the particular of expenses claimed in the return were not correct. The expenses were claimed and quantum additions have been upheld by the Tribunal. However, in the separate proceedings of penalty […]...

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Mere Rejection of section 35D claim not amounts to Concealment of Income

DCIT Vs. ICICI Bank Ltd. (ITAT Mumbai)

DCIT Vs. ICICI Bank Ltd. (ITAT Mumbai) The issue under consideration is whether the CIT(A) is correct in deleting the penalty levied u/s 271(1)(c) on the disallowance of expenses made u/s.35D? ITAT states that, the assessee claimed deduction of preliminary expenses u/s 35D which was rejected by Ld.AO in terms of decision of Hon’ble Madr...

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Section 271(1)(c) Penalty proceedings not sustainable if not specifies Limb

Balaji Telefilms Limited Vs. DCIT (ITAT Mumbai)

Balaji Telefilms Limited Vs. DCIT (ITAT Mumbai) The issue under consideration is whether the penalty proceedings u/s 271(1)(c) without specifying the limb will be sustain under law? ITAT states that, it has been held by Hon’ble Court that the notice would have to specifically state the ground mentioned in Section 271(1)(c) of the Act na...

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Section 271(1)(c) Penalty Justified if Assessee not Acted Bonafidely

Gangotri Textiles Ltd. Vs. DCIT (Madras High Court)

Gangotri Textiles Ltd. Vs. DCIT (Madras High Court) The issue under consideration is whether the penalty u/s 271(1)(c) levied by the assessing officer is justified in law? In the present case, the assessee did not disclose about the sale of the lands and windmill in the return of income, which was clear from the perusal […]...

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Remuneration to Partners as Representative of HUF Allowed u/s 40(b)

Shreeji Corporation Vs JCIT (ITAT Ahmedabad)

The issue under consideration is whether remuneration paid to a partner acting in a representative capacity as karta of HUF is allowed u/s 40(b)?...

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Invocation of Section 263 to initiate Penalty proceeding not sustainable when addition itself deleted by ITAT

Agencies Rajasthan Pvt. Ltd. Vs PCIT (ITAT Jaipur)

Agencies Rajasthan Pvt. Ltd. Vs PCIT (ITAT Jaipur) Invocation of Section 263 of Income Tax Act, 1961 to initiate Penalty proceeding not sustainable when addition itself deleted by ITAT Brief facts of the case are that assessment u/s 143(3) of the Act was completed on 30-12-2017 by the AO and thus the AO made the […]...

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ITAT Allowed Exemption not claimed in ITR filed due to Inadvertence

Max Life Insurance Company Ltd. Vs ACIT (ITAT Delhi)

whether the additional ground submitted by the assessee should be allowed by the tribunal by considering that the assessee has not claimed exemption in the return filed due to inadvertence?...

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Section 271(1)(c) penalty not leviable merely for non challenge to disallowance in Quantum Appeal

DCIT Vs Maharashtra State Power Generation Co. Ltd. (ITAT Mumbai)

DCIT Vs Maharashtra State Power Generation Co. Ltd. (ITAT Mumbai) When the assessee had came forth with the full disclosure of all the particulars in respect of its aforesaid claim of expense, which as observed by us hereinabove had not been proved to be incorrect by the lower authorities, therefore, merely for the reason that […]...

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No section 271(1)(c) penalty for mere discrepancies Found during Survey

Rajendra Shringi Vs DCIT (ITAT Jaipur)

Rajendra Shringi Vs DCIT (ITAT Jaipur) The issue under consideration is whether the penalty order passed u/s 271(1)(c) is justified in law? ITAT states that no doubt, the discrepancies were found during the survey. This has yielded income from the assessee in the form of amount surrendered by the assessee. Presently, ITAT are not concerne...

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No section 271(1)(c) Penalty Merely based on section 37 disallowance

DCIT Vs Maharashtra State Power Generation Co. Ltd. (ITAT Mumbai)

The issue under consideration is whether the cancellation of the penalty u/s 271(1)(c) by the CIT(A) is justified in law?...

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Debate on Nature of Expense- Penalty for disallowance unjustified

Piramal Healthcare Ltd. Vs DCIT (ITAT Mumbai)

Piramal Healthcare Ltd. Vs DCIT (ITAT Mumbai) We find that the assessee had claimed business promotion expenses as revenue expenditure which was sought to be treated by the ld. AO as capital expenditure. This disallowance was ultimately sustained by the Tribunal in the quantum appellate proceedings. We find that the issue in dispute was w...

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Validity of Penalty Notice- Continuing Saga

The Bombay High Court has in its order dated 12th June, 2020 in the case of Ventura Textiles Ltd (ITA No.958/2017) has given a fresh perspective to the controversy of validity of penalty notice under section 271(1)(c). In the past the courts have held that if the show cause notice proposing penalty under section 271(1)(c) do not clearly s...

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No Section 271(1)(c) Penalty on Income Taxed u/s 115JB Before AY 2016-17

Flemingo Travel Retail Limited Vs DCIT (ITAT Mumbai)

The issue under consideration is whether the penalty notice u/s 271(1)(c) issued to the assessee who has taxed his income as per provision of section 115JB pr 115JC is justified in law?...

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Section 132(4) statement & notings found during search sufficient to invoke section 153A jurisdiction

Lalji Khimjibhai Patel Vs ACIT (ITAT Rajkot)

The issue under consideration is whether the assessee is correct in stating that cognizance taken under section 153A of the Act is illegal at the end of the A.O.?...

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No section 271(1)(c) Penalty on Income Surrendered Voluntarily during Assessment

Aravind Kumar Agarwal Vs ACIT (OSD) (ITAT Kolkata)

The issue under consideration is whether Penalty u/s 271(1)(c) can be levied in the case where the assessee surrendered the income voluntarily during the course of the assessment?...

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Section 234B interest cannot be imposed on Payee in case of Failure of Payer to Deduct TDS

HSBC Bank (Mauritius) Ltd. Vs DCIT (International Taxation) (ITAT Mumbai)

ITAT states that under this issue the assessee has challenged the levy of interest u/s 234B of the Act. The payer is under obligation to deduct the tax at source and on account of failure of payer to deduct the tax at source, the penalty interest u/s 234B cannot be imposed on the payee....

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Penalty Order in Name of erstwhile Dissolved Company is invalid

V3S Infratech Ltd. Vs DCIT (ITAT Delhi)

Impugned penalty order passed by the AO in the name of erstwhile dissolved company is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B;...

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Section 271(1)(c) Penalty notice without any Specific allegation is unjustified

Dr. Subash Chandra Jena Vs ACIT (ITAT Cuttack)

Both assessment and the penalty order do not specify as to on which limb the AO intends to impose penalty u/s.271(1)(c) of the Act either for concealment of particulars of income or for furnishing of inaccurate particulars of such income....

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If section 69 not invoked by AO in Order u/s 143(3) then section 115BBE can’t invoked for rectification u/s 154

ACIT Vs Shri Sudesh Kumar Gupta (ITAT Jaipur)

whether CIT(A) is justified in quashing the action of the AO u/s 154 of the Act in applying provision of section 115BBE of the IT Act on undisclosed investment surrendered during the course of survey proceedings?...

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Section 271(1)(c) Notice should clearly specify charge of Penalty

ITO Vs Shri Bimal Talukdar (ITAT Guwahati)

ITO Vs Shri Bimal Talukdar (ITAT Guwahati) The issue under consideration is whether the penalty proceeding u/s 271(1)(c) initiated by the AO sustain Under Income Tax Law? In the present case, the ITAT earlier had allowed the appeal of the assessee and cancelled the penalty levied u/s. 271(1)(c) of the Act by taking note of […]...

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No section 271(1)(c) Penalty for mere claim of expense under different income head

DCIT Vs Metro Tyres Pvt. Ltd. (ITAT Delhi)

The issue under consideration is whether the AO is correct in levying penalty u/s 271(1)(c) merely because the assessee claimed expenditure under a different head of income?...

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Penalty cannot be levied for making a claim which may be erroneous or wrong

Ventura Textiles Ltd. Vs CIT (Bombay High Court)

The issue under consideration is whether the levy of penalty u/s.271(1)(c) of the Act is justified in law for for making a claim which may be erroneous or wrong ?...

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Addition on estimate basis – Section 271(1)(c) cannot be imposed

Samatbhai Malabhai Parmar Vs ITO (ITAT Rajkot)

It is a settled principle of law that where addition to assessee’s income is made on estimate basis penalty under section 271(1)(c) cannot be imposed....

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No Section 271AAB Penalty on Income voluntarily admitted during Search

Ajanta Pharma Limited Vs DCIT (ITAT Mumbai)

The issue under consideration is whether the penalty levied u/s 271AAB of the Act is justified on Income voluntarily admitted during Search by Appellant?...

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No penalty for mere upheld of additions by CIT (A)

PCIT Vs Junjab National Bank (Delhi High Court)

PCIT Vs Junjab National Bank (Delhi High Court)  Merely because additions made by the Assessing Officer have been partially upheld by the CIT (A), would not confer the ground to initiate proceedings under Section 271(1)(c) of the Act of imposition of penalty, unless it is found that there is concealment of material facts, or furnishing [...

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Prosecutions and Punishment under Income Tax Act, 1961

Apart from penalty for various defaults, the Income-tax Act also contains provisions for launching prosecution proceedings against the taxpayers for various offences. In this part you can gain knowledge about the various provisions relating to prosecution which can be launched under the Income-tax Act....

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Posted Under: Income Tax |

Income Tax Offences liable to prosecution

Apart from levy of penalty for various defaults by the taxpayer, the Income-tax Law also contains provisions for launching prosecution for offences committed by the taxpayer. In this part you can gain knowledge about offences in respect of which prosecutions can be launched under the Income-tax Law....

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Power of Commissioner to Reduce or Waive Income Tax Penalty

In the tutorial on Penalties Under the Income-tax Act, we discussed various penalties imposable under the Income-tax Act in respect of various defaults. Apart from enacting penalty provisions...

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Posted Under: Income Tax | ,

Penalties under Income-Tax Act, 1961

Under the Income-tax Act, penalties are levied for various defaults committed by the taxpayer. Some of the penalties are mandatory and a few are at the discretion of the tax authorities. In this part, you can gain knowledge about the provisions relating to various penalties leviable under the Income-tax Act....

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Specified Domestic Transaction- Penalty for Concealment of Income

The provisions of transfer pricing are designed to keep a check on the practice of reducing the tax liability by entering into transactions at prices higher/lower than market prices with one or more associated entity....

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Penalties and Prosecutions Under Income tax Act, 1961

Penalties and Prosecutions Default in complying with provisions of or with conditions prescribed under the Income-tax Act would attract certain penalty and in critical cases prosecutions as well. The document will provide you information about the punishable offences, prosecutions and the quantum of penalties that can be imposed under the...

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Penalties imposable in Income Tax Search Cases

Default in complying with provisions of or with conditions prescribed under the Income-tax Act would attract certain penalty and in critical cases prosecutions as well. There are three modes built in the fiscal legislation for encouraging tax compliance: (a) Charge of Interest; (b) Imposition of penalty; (c) launching of prosecution agai...

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No penalty leviable if finding of AO on bogus purchases was set aside

DCIT Vs Sri Anil J Kothari (ITAT Ahmedabad)

Court concurs with the CIT(A) and the ITAT that once the finding of the AO on bogus purchases was set aside, it could not be said that there was any concealment of facts or furnishing of inaccurate particulars by the Assessee that warranted the imposition of penalty under Section 271(1)(c) of the Act....

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Section 271(1)(c) Penalty leviable as revised return filed only after issuance of notice u/s 143(2)/142(1)

Bhavesh Pravinchandra Sheth Vs ACIT (ITAT Mumbai)

Since assessee had no intention to make a full and true disclosure of its income as it would not have filed a revised return of income showing higher income before issuance of the notice 143(2)/142(1) by AO, therefore, AO  rightly held that assessee had deliberately and consciously failed to furnish full and true particulars of income an...

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Penalty not levaible on addition made solely based on declaration

Jethanand Khemchand Luhana Vs DCIT (ITAT Ahmedabad)

When no money, bullion, jewellery or book entry was found at the time of search, and only evidence against the assessee is an admission of additional income made in the statement under section 132(4), whether such admission tantamount to disclosure of money, bullion, jewellery or diary and income disclosed is to be considered as concealed...

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Penalty cannot be imposed for mere Section 12A registration cancellation

Guru Nanak Public School Vs ACIT (ITAT Chandigarh)

TAT see no reason to uphold the levy of penalty in the present case U/s 271(1)(c) of the Act, since the basis for levy of penalty, being cancellation of registration granted to the assessee U/s 12A of the Act and as a consequence treating its surplus and corpus donation as not exempt but taxable under the Act, has been quashed by the ITAT...

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No penalty for bonafide different perspective in ALP calculation

ITO Vs Tianjin Tianshi India Pvt. Ltd. (ITAT Delhi)

The assessee is one of the group companies of China based TIENS Group of Companies. The business of the assessee, is Trading/Distribution of Food Supplements and Health Care Equipments. The products dealt with by the Company are basically products manufactured at China or other places by Group concerns. Another Group Entity Tianjin Tiansh...

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Mere disallowance due to difference of opinion cannot lead to penalty

DCIT Vs  Duron Technologies (India) Pvt. Ltd. (ITAT Mumbai)

Where assessee was under a bona fide belief about allowability of certain provisions and there was no suppression of facts or deliberate concealment on assessee’s part, mere disallowance by AO due to difference of opinion could not lead to levy of penalty under section 271(1)(c)....

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Return filed U/s. 153A would be deemed to be return filed U/s.139

Sureshbhai Gordhanbhai Prajapati Vs DCIT (ITAT Ahmedabad)

Where assessee had filed return under section 153A, which was accepted by revenue, therefore, no penalty under section 271(1)(c) could be imposed for concealment of income because return filed under section 153A would be deemed to be return filed under section 139....

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No penalty for wrong interpretations of provisions of Income Tax Act

Sunita Shreegopal Barasia Vs Asstt. CIT (ITAT Mumbai)

Penalty under section 271(1)(c) could not be levied for bonafide explanation furnished by assessee as assessee had not offered interest income for tax due to wrong interpretations of the provisions of the Act, not on account of deliberate concealment of income or furnishing of inaccurate particulars of such income....

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No Section 271(1)(c) penalty for genuine omissions in Income Tax Returns

Omega Corrugators Pvt. Ltd Vs ITO (ITAT Mumbai)

Omega Corrugators Pvt. Ltd Vs ITO (ITAT Mumbai) ITAT Mumbai bench has held that genuine omissions must be excluded from the levy of penalty under section 271 (1)(c) of the Income Tax Act, 1961. We find that assessee has debited a sum of Rs.3,57,541/- towards loss on sale of motor car in its profit and […]...

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No Penalty on Income declared in revised return filed within limitation period

Gajjan Singh Thind Vs ACIT (ITAT Chandigarh)

The provisions of section 271(1)(c) of the Act are penal in nature and they are required to be strictly construed. These cannot be extended by way of liberal interpretation to include the cases, which otherwise, do not fall within the purview and scope of the provisions of section 271(1)(c) of the Act....

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No penalty for wrong claim due to inadvertent clerical error committed by CA

Harish Kumar, (Huf) Vs DCIT (ITAT Delhi)

Making of wrong claim due to inadvertent clerical error committed by Chartered Accountant could not be classified as furnishing of inaccurate particulars so as to levy penalty under section 271(1)(c) when assessee had voluntarily filed revised computation and AO had completed assessment on the basis of details furnished by assessee....

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Share application Money in Cash- False details- Penalty Justified

Deepak Petrochem Ltd. Vs DCIT (ITAT Ahmedabad)

Deepak Petrochem Ltd. Vs DCIT (ITAT Ahmedabad) Brief facts of the case are that the assessee has filed its return of income on 30.10.2002 declaring total loss at Rs.29,31,379/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. On scrutiny of the [&hellip...

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Penalty cannot be levied on surmises, conjectures and possibilities

Rajendra Shingi Vs DCIT (ITAT Jaipur)

Concealment of particulars of income or furnishing of inaccurate particulars of income by the assessee has to be in the income tax return filed by it. Even if some discrepancies were found during the survey resulting in surrender of income by the assessee, once the assessee has declared the said income in the return of income filed under ...

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No Penalty Merely for denial of expenditure claimed as revenue

Nortel Networks India Pvt. Ltd. Vs DCIT (ITAT Delhi)

Nortel Networks India Pvt. Ltd. Vs DCIT (ITAT Delhi) In the instant case, the assessee has offered Explanation as why the transaction of loss of security was claimed as business loss. This Explanation has not found to be false by the Assessing Officer. Further, the assessee substantiated the Explanation by way of filing relevant documents...

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No concealment penalty even for not disclosing income in ITR if shown in balance sheet

PCIT Vs Trisha Krishnan (Madras High Court)

Assessee, in the instant case, has not concealed the income deliberately (particularly in the light of the fact that advances have been shown in the balance sheet filed even along with the original return) and therefore, is not liable for imposition of penalty under Section 271(1)(c) of the IT Act....

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Penalty u/s 271(1)(c) not valid in absence of proper record of satisfaction

PCIT Vs Goa Coastal Resorts and Recreation Pvt. Ltd. (Bombay High Court) at Goa

PCIT Vs Goa Coastal Resorts and Recreation Pvt. Ltd. (Bombay High Court) Notice which is issued to the assessee must indicate whether the Assessing Officer is satisfied that the case of the assessee involves concealment of particulars of income or furnishing of inaccurate particulars of income or both, with clarity. If the notice is issue...

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Penalty cannot be imposed when income was estimated by applying a percentage

Mr. Mohammed Sharif Vs ITO (ITAT Mumbai)

We find that in this case the assessment was framed by the AO after making ex-parte addition of Rs.16,54,146/-towards 100% of the bogus purchases which the co-ordinate bench of the Tribunal in quantum proceedings reduced to 12.5% of such purchases. In our opinion, this is a clear cut case where the income has been estimated by applying a ...

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Penalty cannot be levied on ground which was not raised

Sh. B.R.Sharma Vs ITO (ITAT Delhi)

In this case assessee was asked to explain penalty on one count, whereas Penalty has been levied on other count. This itself called for quashing of penalty order passed by AO for all years under consideration. Therefore, penalty order was quashed and set aside....

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Notice issued by AO without specifying grounds of penalty is not valid

Smt. Jayalakshmi Vs ITO (ITAT Bangalore)

Where AO had issued the notice of penalty without specifying the grounds on which the same was imposed, imposition of penalty was unjustified, because this being a mandatory requirement could not be construed as a mere technical error....

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Mere discrepancy in Form 26AS & 16 not amounts to concealment

Chalapati Katiki Vs ITO (ITAT Hyderabad)

Taking into account the amount mentioned in Form 26AS it could not be said that the assessee had concealed amount or furnished inaccurate particulars of income. However, penalty was restricted to the tax sought to be evaded on the amount of commission income not disclosed by assessee....

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Penalty cannot be levied if addition itself was debatable

M/s Google India Pvt.Ltd. Vs ACIT (ITAT Bangalore)

Additions in respect of which penalty was confirmed has been accepted by Hon’ble Karnataka High Court, leading to substantial question of law. Thus when Hon’ble High Court admitted substantial question of law on additions, it becomes apparent that issue is certainly debatable. In such circumstances penalty cannot be levied under secti...

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Penalty u/s 271(1)(c) cannot be levied if more than one legal view is possible

M/s. Nortel Networks India Pvt. Ltd. Vs DCIT (ITAT Delhi)

M/s. Nortel Networks India Pvt. Ltd. Vs DCIT (ITAT Delhi) In the instant case, the assessee has offered Explanation as why the transaction of loss of security was claimed as business loss. This Explanation has not found to be false by the Assessing Officer. Further, the assessee substantiated the Explanation by way of filing relevant [&he...

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No penalty for income declared in original return filed within time U/s. 139(1) post Survey

DCIT Vs Dr. Ravindra Babasaheb Kadam (ITAT Pune)

DCIT Vs Dr. Ravindra Babasaheb Kadam (ITAT Pune) The issue in the present ground is with respect to levy of penalty u/s 271(1)(c) of the Act. It is an undisputed fact that additional income of Rs.1.49 crores was offered by the assessee during the course of survey conducted on 12.01.2012. It is also a fact […]...

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Penalty cannot be levied for mere disallowance of claim of deduction u/s 54

ITO Vs Shri Kantilal G. Kotecha (ITAT Mumbai)

ITO Vs Shri Kantilal G. Kotecha (ITAT Mumbai) We find that with regard to claim of deduction u/s 54 of the Act, this tribunal in quantum proceedings had granted deduction u/s 54 of the Act to the extent of payments made within the prescribed limitation period i.e payments made within one year prior to the […]...

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Penalty not leviable if vagueness & ambiguity in recording of satisfaction

Chandu Laxman Chavan Vs DCIT (ITAT Pune)

Chandu Laxman Chavan Vs DCIT (ITAT Pune) While levying penalty, the Assessing Officer invoked only the charge of “furnishing inaccurate particulars of income”. It is evident that while recording satisfaction the Assessing Officer was not clear in his mind as to which charge u/s. 271(1) (c) is to be invoked for initiating penalty. The ...

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Penalty sustained if Charge for initiation of penalty & charge while levying was same

Shri Harish Chand Narang Vs ACIT (ITAT Jaipur)

Shri Harish Chand Narang Vs ACIT (ITAT Jaipur) The sum and substance of above decision is that the nature of specification of charge by the A.O. at the stage of initiation of penalty proceedings at the time of issue of notice U/s 274 read with Section 271(1)(c) of the Act and at the time of […]...

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Penalty should not be imposed for Inadvertent and Bonafide Error

Rasai Properties Pvt. Ltd. Vs DCIT (ITAT Mumbai)

Rasai Properties Pvt. Ltd. Vs DCIT (ITAT Mumbai) Admittedly, there has been an omission on the part of the assessee to disclose the LTCG on sale of the shops in its return of income for the year under consideration. However, at the same time, we cannot remain oblivious of the bonafides of the assessee, which […]...

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Prosecution for tax evasion not sustainable if Penalty been deleted

M/s. System India Castings Vs Pr. CIT (Chhattisgarh High Court)

M/s System India Castings Vs Pr. CIT (Chhattisgarh High Court) It was mentioned that the assessee has preferred an Appeal against the penalty order before the CIT (Appeals), Raipur, which is pending for decision. When the CIT (Appeals) heard the appeal preferred by the assessee on merits, it reached to the conclusion that the petitioner [...

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Penalty cannot be sustained merely for disallowance of Depreciation claimed at higher rate

MakeMy Trip (India) Pvt. Ltd. Vs DCIT (ITAT Delhi)

MakeMy Trip (India) Pvt. Ltd. Vs DCIT (ITAT Delhi) As regards the penalty based on addition on account of difference in rate of depreciation on computer peripherals, the Assessing Officer has observed that the assessee made a wrong claim of depreciation @ 60% on printers, UPS, computer stationery, routers and scanners by clubbing them wit...

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New Penalty Provisions Under Section 270A

Satender Singh Rana Commissioner of Income Tax(DR)-7, ITAT, Delhi s.s.rana@incometaxindia.gov.in Sri Satender Singh Rana is an IRS officer of 1994 Batch and is currently posted as Commissioner of Income Tax, ITAT, New Delhi. He has extensive experience in the field of Income Tax Litigation and judicial matters and is part of several commi...

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Posted Under: Income Tax |

Penalty Notice cannot be challenged merely for issue in Template manner

Amtex Software Solutions Pvt. Ltd Vs ACIT (Madras High Court)

Issuing of show cause notice in a template-like manner  cannot be challenged on basis that it was not clear as to whether the same had been issued for concealing particulars of income' or furnishing of inaccurate particulars' of such income merely by reason of mistake or defect i.e., mistake or defect of issuing it in a template and not ...

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Cancer Treatment is reasonable cause for delay in Appeal Filing: ITAT

Shri Pradipta Kumar Das Vs The Assistant Commissioner of Income Tax (ITAT Chennai)

Assessee was diagnosed with Cancer in December, 2017 and the ld. CIT(A) passed the order on 20.03.2018, which is subsequent to the diagnosis of the illness, needless to mention that treatment of cancer is very painful and it is not possible to focus on other issues when he was under the treatment and therefore in our opinion, there is a r...

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Penalty cannot be imposed for mere wrong claim of TDS

M/s. V.K. Lalco Pvt. Ltd. Vs DCIT (ITAT Mumbai)

M/s. V.K. Lalco Pvt. Ltd. Vs DCIT (ITAT Mumbai) In this case the penalty was levied for wrong claim of TDS in the return of income to the tune of Rs.3,48,120/- without offering the corresponding income to tax. In fact this TDS did not belong to the assessee but appeared in the form No. 26AS […]...

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No Penalty for Rejection of Bonafide Claim

Pr. CIT Vs Shamrao Vithal Co-Op Bank (Bombay High Court)

Pr. CIT Vs Shamrao Vithal Co-Op Bank (Bombay High Court) The division bench of the Bombay High Court has held that penalty cannot be levied under the Income Tax merely on the ground that a deduction claim was rejected by the department. The assessee is a Co-operative Bank. For the relevant A.Y under consideration, the […]...

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Penalty on the grounds of retrospective amendment not justified

DCIT (E) Vs Baroda Cricket Association (ITAT Ahmedabad)

DCIT (E) Vs Baroda Cricket Association (ITAT Ahmedabad) Article 20(1) of the Constitution of India provides certain protection in this regard which states that no person can be convicted for any offence except for a violation of a law in force at the time of action charged an offence, nor be subjected to a penalty […]...

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Penalty cannot be imposed on disallowance of creditors for want of address verification

Kishor A. Sewani Vs ITO (ITAT Ahmedabad)

Where sundry creditors arising out of the purchases debited in the profit and loss account as revenue expenses, were added to income of assessee for want of the addresses of said creditors, that did not mean assessee had concealed the particulars of income or furnished inaccurate particulars of income, so as to impose penalty under sectio...

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Penalty U/s. 27(1)(c) cannot be levied for not following FIFO method

Pr. CIT­ Vs Prakash Mangilal Jain (Bombay High Court)

Pr. CIT Vs Prakash Mangilal Jain (Bombay High Court) Following FIFO or LIFO method cannot be the basis for levying penalty as per the provisions of section 271(1)(c) of the Act. In order to justify the levy of penalty, two factors must co-exist, (i) there must be some material or circumstances leading to the reasonable […]...

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Initiation of penalty not valid if AO fails to record satisfaction for the same

ACIT Vs M/s. International Cars & Motors Ltd (ITAT Delhi)

Where no satisfaction had been recorded by the AO for initiation of penalty in the assessment order the same cannot invite the assessee to penalty under section 271(1)(c)...

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Penalty justified for Deliberate non-disclosure of income

Smt Joyti Sunil Maniyar Vs ITO (ITAT Ahmedabad)

Smt Joyti Sunil Maniyar Vs ITO (ITAT Ahmedabad) In the notice issued u/s 142(1) dated 11.10.2011 a specific query was raised by the AO about the capital gain income. After that, the assessee vide reply dated 22.11.2011 conceded the fact of non-disclosing the capital gain income. From the above, it is transpired that the assessee […...

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Penalty cannot levied on suo motu income declared in revised return 

Pr. CIT Vs Sterlite Opportunities and Ventures Ltd. (Bombay High Court)

Pr. CIT Vs Sterlite Opportunities and Ventures Ltd. (Bombay High Court) revised return filed under Section 139(5) of the Act, was valid return of income filed by the Respondent on its own and not on the basis of any investigation/ discovery done by the department of inaccurate particulars in the original return of income. Thus, […]...

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Levy of penalty is not warranted in case of Vague Charges

Zaheer Abdulhamid Mulani Vs ITO (ITAT Pune)

Zaheer Abdulhamid Mulani Vs ITO (ITAT Pune) The sanctity in terms of natural justice with regard to this proposition is that the assessee under the scheme of welfare legislation which is embedded in the Income Tax Act, 1961 should get an opportunity to prepare himself for the defense as regards to the exact charge on which […]...

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No Penalty for mere rejection of Sec 54F claim against tenancy right Sale

PCIT Vs Rasiklal M. Parikh (Bombay High Court)

The dispute between the Assessee and the Revenue was with reference to actual payment for purchase of the flat and whether when the Assessee had purchased one more flat, though contagious, could the Assessee claim exemption under Section 54F of the Act. ...

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Penalty imposed without issuing a proper show-cause notice is invalid

Shri Vivek Chugh Vs ACIT (ITAT Indore)

In the present case at the very inception notice initiating penalty is not in accordance with mandates of law. Moreover, it is settled position of law that such defect is not curable u/s 292BB of the Act. Therefore, we hereby quash the penalty order....

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Penalty U/s. 271(1)(c) justified on income disclosed during survey

Kashish Enterprise Vs ITO (ITAT Rajkot)

Assessee did not disclose income voluntarily but it was disclosed in pursuance to survey conducted under section 133A. Had there not been survey, the assessee would not have offered such undisclosed income, penalty under section 271(1)(c) was correctly levied by AO....

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Penalty U/s. 271(c) not sustainable if notice not have specific charge

ITO Vs M/s. Ambey Retailers Pvt. Ltd. (ITAT Kolkata)

As notice issued under section 274 read with section 271(1)(c) of Income Tax Act, 1961 did not specify particular viz., whether assessee had concealed particulars of income or had furnished inaccurate particulars thereof, hence, levy of penalty could not be sustained....

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Penalty U/s. 271(1)(c) on Disclosure of income due to search operation 

Brijesh Jaikishin Rupani Vs ITO (ITAT Mumbai)

Brijesh Jaikishin Rupani Vs ITO (ITAT Mumbai) ITAT Mumbai held that The income offered by assessee in income filed pursuant to issue of notice under section 153A was the income detected during the course of search and seizure operation. The case of assessee was squarely covered by provisions of Explanation 5A to section 271(1)(c), because...

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No Penalty U/s. 271(1)(c ) for human error with no willful concealment

Jefferris India Pvt. Ltd. Vs. ACIT (ITAT Mumbai)

Jefferris India Pvt. Ltd. Vs. ACIT (ITAT Mumbai) When there was no willful concealment and mistake involved human error, penalty under section 271(1)(c ) deleted...

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Declaration of additional incomes when AO confronted with details of Form No. 26AS attract penalty

Manoj S. Gugale Vs ITO (ITAT Pune)

Assessee had declared additional incomes when AO confronted with details of Form No. 26AS , it could not be said that declaration of income by assessee was voluntary, therefore, levy of penalty under section 271(1)(c) on account of concealment was justified, especially in view of the fact that similar income had been earned and duly offer...

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No penalty for claim of exemption u/s 54 instead of section 54F

Smt. Gaytri Sharma Vs ITO (ITAT Jaipur)

Penalty under section 271(1)(c) could not be levied as assessee had proved that there was a reasonable cause for making the wrong claim under section 54 instead of section 54F....

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Order dropping penalty proceedings u/s 271(1)(c) – Revision u/s 263 – A Case Study

Through this article an attempt has been made to explain the circumstances where the revisionary powers of the commissioners u/s 263 can be invoked when the order dropping penalty proceedings u/s 271(1)(c) of the I.T. Act, 1961 was passed by the Assessing Officer. In the case of M/s. DEF, an India Company, an order was […]...

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Posted Under: Income Tax |

No penalty u/s 271(1)(c) for disallowance of administrative expenses claimed against LTCG

Amit Capital & Securities (P) Ltd. Vs ITO (ITAT Mumbai)

Merely because assessee's had claimed administrative expenditure which was not acceptable to Revenue, that by itself would not attract penalty under Section 271(1)(c) if there was absence of concealment and / or furnishing of inaccurate particulars of income....

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Penalty U/s. 271(1)(c) not justified without specifying the grounds in penalty notice

Ms Kaveri Infrastructure Pvt. Vs DCIT (ITAT Delhi)

AO was not justified in imposing penalty under section 271(1)(c) on assessee without specifying the grounds in the penalty notice as the same could not be construed as a mere technical error...

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Penalty not justified, if both assessment order & SCN failed to state specific charge

Sanraj Engineering (P) Ltd. Vs ITO (ITAT Delhi)

Sanraj Engineering (P) Ltd. Vs ITO (ITAT Delhi) Levy of penalty under section 271(1)(c) was not justified, where both the assessment order and show cause notice failed to state the specific charge of concealment and/or furnishing of inaccurate particulars of income by assessee. FULL TEXT OF THE ITAT JUDGMENT Aggrieved by the order dated 2...

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S. 271(1)(c) Penalty notice is defective if not specifies a particular charge

RBM Pati Joint Venture Vs DDIT (ITAT Delhi)

RBM Pati Joint Venture Vs DDIT (ITAT Delhi) An insight over the penalty order, we find that the penalty was initiated on account of loss claimed by the appellant on sale of assets, even though, that particular block of assets had not been exhausted. We do not find any justification to discard the findings reached […]...

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HC on issue of prosecution notice despite admission of Appeal by HC

M. Suresh Company Pvt Ltd Vs Pr. CIT (Bombay High Court)

M. Suresh Company Pvt Ltd Vs Pr. CIT (Bombay High Court) 1. This Motion is taken by the appellant assessee in Income Tax Appeal No. 738 of 2016. The appeal arises out of a judgment of the Income Tax Appellate Tribunal confirming penalty against the assessee under Section 271(1)(c) of the Income Tax Act, 1961. […]...

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No Penalty when expenses disallowed were otherwise allowable in next year

Granite Gate Properties (P.) Ltd. Vs PCIT (Delhi High Court)

The relevant clauses of AS-7, applicable Guidance Notes, the fact that the accounts were duly audited and the disclosures made in the audit notes, the loss income as declared, small taxable income as assessed even after the additions were made and that the expenses as claimed were otherwise eligible and allowed in the next assessment year...

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Penalty under section 271(1)(c ) after CIT (Appeal) order

Time limit for levy penalty under section 271(1)(c) after Commissioner Appeal order Recently, my  friend made me a panic call as he received a notice for levying penalty under section 271(1)(c) of the Income Tax Act after the commissioner (A) has dismissed quantum appeal and the assessee has further filed the appeal before the Honorable ...

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Posted Under: Income Tax |

Penalty cannot be levied on Addition of Notional House Property Income

Shri Suresh Shivlal Bhasin Vs ACIT (ITAT Mumbai)

Shri Suresh Shivlal Bhasin Vs ACIT (ITAT Mumbai) As regards imposition of penalty on the addition made on account of notional house property income, it goes without saying that in reality the assessee has not earned any income from house property. The Assessing Officer himself has observed that the addition made on account of income [&hel...

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No Penalty under Section 271(1)(c) in absence of any Concealment

Shri Shambhu Dayal Sharma Vs ITO (ITAT Delhi)

Assessee provided details of deposits and source from where the deposits have been made in the bank account. Only the relevant parties were not presented to establish the genuineness of the transaction and the same cannot lead to concealment....

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Penalty U/s. 271(1)(c) not sustainable on failure of AO to strike off inappropriate words in show-cause notice U/s. 274

Ratan Kumar Paul Vs DCIT (ITAT Kolkata)

Where show cause notice issued under section 274 read with section 271(1)(c) did not specify charge against assessee as to whether it was for concealing particulars of income or furnishing inaccurate particulars of income, levy of penalty could no be sustained....

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Making incorrect claim in law would not by itself make assessee liable to penalty U/s. 271(1)(c)

CIT Vs L & T Finance Ltd. (Bombay High Court)

Making of incorrect claim in law would not by itself amount to concealment of income or giving inaccurate particulars of income. Since revenue had not been able to show even remotely that there was any concealment of income or filing of inaccurate particulars of income, appeal was to be dismissed....

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No penalty on excess depreciation claim for bona fide reasons

DCIT Vs Federal Brands Ltd. (ITAT Mumbai)

An excess claim of depreciation by an assessee for bonafide reasons would not justify imposition of penalty under section 271(1)(c) had also been deliberated upon by the Hon'ble High Court of Bombay in the case of CIT vs. Somany Evergreen Knits Ltd. (2013) 352 ITR 592 (Bom.)...

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Penalty U/s. 271(1)(c) not sustainable on deletion of addition for relevant expenses

DCIT Vs Prabhudas Liladhar P. Ltd. (ITAT Mumbai)

Prabhudas Liladhar P. Ltd. Case: Once The Whole Basis Of Addition Itself As Made By The AO In Quantum Has Been Deleted By The Tribunal And Expenses Were Related To The Business Penalty Levied By The AO Under Section 271(1)(c) Deleted...

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