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Pr. CIT Vs Shanti Lal Jain (Rajasthan High Court) It is an admitted position that for the purpose of getting immunity from the penalty imposed under Clause 2 of explanation 5 to section 271(1)(c) of the Income Tax Act, 1961, three conditions are required to be satisfied by the assessee. Firstly, if the assessee makes […]
Aforesaid appeal by the assessee is against order dated 28th December 2015, passed by the learned Commissioner (Appeals)–37, Mumbai, confirming penalty under section 271(1)(c) of the Income-tax Act, 1961 (for short the Act) for the assessment year 2010–11.
In the instant case, nothing is on record to show that there was any malafide intention on the part of the assessee to conceal the income or furnish inaccurate particulars of income and there was an omission while filing the return of income which was rectified through challan on the very date of passing the assessment order.
These are appeals by the Assessee against three orders all dated 13.06.2016 of C.I.T.(A)-I, Kolkata relating to A.Y. 2006-07 to 2008-09.
The ITAT bench comprising of Accountant Member T. S. Kapoor and Judicial Member Partha Sarathi Chaudhury, held that penalty under Section 271(1)(c) of the Income Tax Act, 1961 would not attract when assessee makes an Ineligible Claim.
The Kolkata bench of ITAT recently held that penalty cannot be levied since show cause notice issued in the present case under Section 274 of the Income Tax Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income.
Assessee is not absolved of penalty because the additional income has been declared to buy peace. It must follow therefore that the above strategy (buy peace) by itself will not justify imposition of penalty, unless the requirement of the section under which the penalty is imposed are satisfied.
. The provisions of section 271(1)(c) are not attracted in cases where income of the assessee is assessed on an estimate basis and addition is made on that basis. Even if the assessee is not able to substantiate the explanation, but his explanation is not lacking bona fide, and, therefore, we are of the view that it is not a fit where vigour of provisions of section 27 1(1) is attracted.
The Income Tax Appellate Tribunal (ITAT), Mumbai bench, on Wednesday furnished an order which ensure that tax payers are not charged penalty for unspecified reasons.
Nowhere in the assessment order states the specific charge of alleged concealment and / or furnishing of inaccurate particulars of income. Therefore, the entire penalty proceedings stand vitiated, because it is not in accordance with law.
