271 1 c
This query is : Resolved
Guest
Guest
(Querist)
15 December 2009
can penalty u/s. 271 1 c be demanded before quantum is decided by Tribunal...??
any caselaw on this matter..???
any caselaw on this matter..???
15 December 2009
Facts are not clear.
I predict that you have filed an appeal against penalty and now case is lying before tribunal.
A stay petition can be made to Tribunal.
I predict that you have filed an appeal against penalty and now case is lying before tribunal.
A stay petition can be made to Tribunal.
Guest
Guest
(Querist)
16 December 2009
no Sir,
quantum has been dismissed by CIT -A, n now assessee is in appeal before ITAT...
however penalty appeal is yet to be decided by the CIT - A...so i want supporting judgment in this regard...
quantum has been dismissed by CIT -A, n now assessee is in appeal before ITAT...
however penalty appeal is yet to be decided by the CIT - A...so i want supporting judgment in this regard...
Guest
Guest
(Expert)
17 December 2009
Penalty U/s. 271(1)(c) can not be imposed on the basis of routine & general presumptions
Income Tax Case Laws
SUMMARY OF CASE LAW
Mere non-acceptance of explanation offered by the assessee cannot form a basis for the satisfaction of ITO to the effect that the assessee has concealed particular of his income; the ITO must have some definite evidence to refuse assessee’s claim or evidence or explanation.
CASE LAW DETAILS
Decided by:. ITAT, MUMBAI BENCH `B’ MUMBAI
In The case of: ITO v GACL Finance Ltd.
Appeal No. : ITA NO. 6528/M/05
Decided on: MARCH 19, 2009
RELEVENT PARAGRAPH
6.1 The proceedings under section 271(1) (C) can be initiated only if the A.O or the first Appellate authority is satisfied in the course of any proceedings under the Act. If he is satisfied as per clause (c) that any person has concealed the particulars of his income or has furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty the sum mentioned in sub-clause (iii) of clause (c). The expression used in clause (c) is ‘has concealed the particulars of his income’ or ‘furnished inaccurate particulars of such income’. Therefore, both in cases of concealment and inaccuracy the phrase ‘particulars of income1 are used. It will be noted that as regards concealment, the expression in clause (c) is ‘has concealed the particulars of his income’ and not ‘has concealed his income’. The expressions “has concealed the particulars of income†and “has furnished inaccurate particulars of income†have not been defined either in section 271(1)(c) or elsewhere in the Act. One thing is certain that these two circumstances are not identical in detail although they may lead to the same effect, namely, keeping off a certain portion of income. The former is direct and the latter may be indirect in its execution.
6.2 The word “conceal†is derived from the latin concelare which implies con+celare to hide. Webster in his New International Dictionary equates its meaning “to hide or withdraw from observation, to cover or keep from sight; to prevent the discovery of; to withhold knowledge ofâ€. The offence of concealment is thus a direct attempt to hide an item of income or a portion thereof from the knowledge of the income-tax authorities. There is strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The penalty under that provision is a civil liability. Willful concealment is not an essential ingredient for attracting civil liability. It is obvious that the penal provisions would operate when there is concealment of particulars of income or a failure of duty to disclose fully and truly particulars of income, imposed under the Act and the Rules there under. The duty is enjoined upon a person to make a correct and complete disclosure of his income and it is only when he fails in his duty by not disclosing his income or part thereof, he conceals the particulars of his income. The duty is enjoined upon him to make a complete disclosure of his income as well as a correct disclosure. Therefore, if the disclosure made-of the particulars of income is incorrect, then also he commits breach of his duty. Such defaults entail the penal consequences contemplated by section 271(1)(c)(iii) .
6.7 There cannot be a straight jacket formula for detection of these defaults of concealment or of furnishing inaccurate particulars of income and indeed concealment of particulars of income and in accurate particulars of income may at times overlap. It depends upon the fads of the each case. In the assessment proceedings the ITO while ascertaining the total income chargeable to tax would be in a position to detect the specific or definite particulars of income concealed or of which false particulars are furnished. Where in the constituents of income returned, such specific or definite particulars of income are detected as concealed, then even in the total income figure to that extent they reflect, it would amount to concealment to that extent. In the same way where specific and definite particulars of income are detected as inaccurate, then such figure will also make the total income inaccurate in particulars to the extent it does not include such income. In other, words the AO cannot invoke provision of section271 (1) (c) on the basis of routine and general presumptions. Whether it be a case of only concealment or of only inaccuracy or both, the particulars of income so vitiated would be specific and definite and be known in the assessment proceedings by the ITO, who on being satisfied about each concealment or inaccuracy of particulars of income would be in a position to initiate the penalty proceedings on one or both of the grounds of default as may have been specifically and directly detected.
6.10 Part A of the Explanation to section 271(1) (c) provides that if assessee fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, This explanation can therefore, be applied only where the assessee has either not offered any Explanation or where he has offered any Explanation, the same found to be false by the ITO etc. in other words , where the assessee offers some explanation, it is only the proving by the assessee officer of the explanation to be false, that part A of the Explanation may be attracted, Mere non acceptance of explanation offered by the assessee cannot form a basis for the satisfaction of ITO to the effect that the assessee has concealed particular of his income. The ITO must have some definite evidence to refuse the assessee’s claim or evidence or explanation.
Income Tax Case Laws
SUMMARY OF CASE LAW
Mere non-acceptance of explanation offered by the assessee cannot form a basis for the satisfaction of ITO to the effect that the assessee has concealed particular of his income; the ITO must have some definite evidence to refuse assessee’s claim or evidence or explanation.
CASE LAW DETAILS
Decided by:. ITAT, MUMBAI BENCH `B’ MUMBAI
In The case of: ITO v GACL Finance Ltd.
Appeal No. : ITA NO. 6528/M/05
Decided on: MARCH 19, 2009
RELEVENT PARAGRAPH
6.1 The proceedings under section 271(1) (C) can be initiated only if the A.O or the first Appellate authority is satisfied in the course of any proceedings under the Act. If he is satisfied as per clause (c) that any person has concealed the particulars of his income or has furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty the sum mentioned in sub-clause (iii) of clause (c). The expression used in clause (c) is ‘has concealed the particulars of his income’ or ‘furnished inaccurate particulars of such income’. Therefore, both in cases of concealment and inaccuracy the phrase ‘particulars of income1 are used. It will be noted that as regards concealment, the expression in clause (c) is ‘has concealed the particulars of his income’ and not ‘has concealed his income’. The expressions “has concealed the particulars of income†and “has furnished inaccurate particulars of income†have not been defined either in section 271(1)(c) or elsewhere in the Act. One thing is certain that these two circumstances are not identical in detail although they may lead to the same effect, namely, keeping off a certain portion of income. The former is direct and the latter may be indirect in its execution.
6.2 The word “conceal†is derived from the latin concelare which implies con+celare to hide. Webster in his New International Dictionary equates its meaning “to hide or withdraw from observation, to cover or keep from sight; to prevent the discovery of; to withhold knowledge ofâ€. The offence of concealment is thus a direct attempt to hide an item of income or a portion thereof from the knowledge of the income-tax authorities. There is strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The penalty under that provision is a civil liability. Willful concealment is not an essential ingredient for attracting civil liability. It is obvious that the penal provisions would operate when there is concealment of particulars of income or a failure of duty to disclose fully and truly particulars of income, imposed under the Act and the Rules there under. The duty is enjoined upon a person to make a correct and complete disclosure of his income and it is only when he fails in his duty by not disclosing his income or part thereof, he conceals the particulars of his income. The duty is enjoined upon him to make a complete disclosure of his income as well as a correct disclosure. Therefore, if the disclosure made-of the particulars of income is incorrect, then also he commits breach of his duty. Such defaults entail the penal consequences contemplated by section 271(1)(c)(iii) .
6.7 There cannot be a straight jacket formula for detection of these defaults of concealment or of furnishing inaccurate particulars of income and indeed concealment of particulars of income and in accurate particulars of income may at times overlap. It depends upon the fads of the each case. In the assessment proceedings the ITO while ascertaining the total income chargeable to tax would be in a position to detect the specific or definite particulars of income concealed or of which false particulars are furnished. Where in the constituents of income returned, such specific or definite particulars of income are detected as concealed, then even in the total income figure to that extent they reflect, it would amount to concealment to that extent. In the same way where specific and definite particulars of income are detected as inaccurate, then such figure will also make the total income inaccurate in particulars to the extent it does not include such income. In other, words the AO cannot invoke provision of section271 (1) (c) on the basis of routine and general presumptions. Whether it be a case of only concealment or of only inaccuracy or both, the particulars of income so vitiated would be specific and definite and be known in the assessment proceedings by the ITO, who on being satisfied about each concealment or inaccuracy of particulars of income would be in a position to initiate the penalty proceedings on one or both of the grounds of default as may have been specifically and directly detected.
6.10 Part A of the Explanation to section 271(1) (c) provides that if assessee fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, This explanation can therefore, be applied only where the assessee has either not offered any Explanation or where he has offered any Explanation, the same found to be false by the ITO etc. in other words , where the assessee offers some explanation, it is only the proving by the assessee officer of the explanation to be false, that part A of the Explanation may be attracted, Mere non acceptance of explanation offered by the assessee cannot form a basis for the satisfaction of ITO to the effect that the assessee has concealed particular of his income. The ITO must have some definite evidence to refuse the assessee’s claim or evidence or explanation.
Guest
Guest
(Querist)
17 December 2009
thanks Sir...
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- Applicable TDS rate for sale of property in Nov 2024
- Inventory of finished goods
- Tds on building rent monthly
- RCM INVOICING FROM NOV-2024
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Sale of property furniture sale
- Confusion around Form 26QB fields
- Adjustment entry in the case of Individual and HUF on 31st March
- Stock difference tax applicable on composite rate or normal rate
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
Trending Online Classes
CAclubindia
