Tax sought to be evaded u/s. 271(1)(c)

As per the provisions of section 271(1)(c) the nature of default for attracting the section is 

•  
• 1. Concealment of particulars of income; or

2. Furnishing inaccurate particulars of such income  

In my opinion the above basic requirement for attractiong sec. 271(1)(c) is fulfilled. Hence, the action of the AO is correct in attracting the section BUT PENALTY will not be levied the reason being as follows:

1.   The quantum of the penalty is to be determined by considering the amount of tax sought to be evaded;

2. In your case the assessee has received the income which he has concealed net of TDS hence no question regarding tax evasion;

3. Hence, basic requirement is the concealment of income should result in tax evasion.

As there is no evasion penalty cannot be levied.

Regards,

Shraddha 

As per sec 271(1)(c) if it is proved dat tax have been evaded den penalty as mentioned is calculated on the tax amount sought to be evaded....in your case in ma opinion since finaly no tax is evaded after tds adjusment den penalty is also not levieable....

Pls correct me if m wrong.

No Doubt AO impose penalty u/s 271 (1)c on concealment of income (i.e.not giving particulars of income in ROI) you can take the ground that tax evaded is NIL therefore penalty should not attracted

Please refer to Clause-(a) of Explanation-4 to Sec-271(1)(c), which defines the expression "The Amount of Tax Sought to be Evaded" as refered to in Clause (iii) of the Section. In my opinion, penalty can be imposed on the differential tax computed on the income particulars which has been concealed.

Here explanation 3 of sec 271(1)(c) is imposed, where it was held that the amount which have been diclosed in finding of A.O. should be lible to be taxed as if it was the undiscloed income no amount of set off should be given if there was a loss.

but if there was alraedy a positive income then also penalty for concealment of income u/s 271(1)(c) can be imposed.

so here A.O. contention is correct & penalty can be imposed even if the T.D.S is there & nil amount of tax payable.

Agree with CA Pramod Kumar Panda Sir.

Section 271(1)(c)(iii) says that penalty will be "a sum which shall not be less than but which shall not exceed three times the amount of tax sought to be evaded"

Explaination 4 clause 1 says that the term "amount of tax sought to be evaded" means "the tax that would have been chargeable on the income in respect of which particulars have been concealed have been furnished had such income been the total income"

for e.g. if there is an interest income that the assesse is concealing on which TDS deducted is @ 10%. but the income of the assesse falls in the 30% tax slab. Now isn't that tax evasion?
So to handle such situation,  clause 1 of Explaination 4 is kept different from clause 2 (which provides for credit of prepaid taxes)