Penalty Imposable
1. Section 271(1)(c) provides for levy of concealment penalty if the assessee furnishes inaccurate particulars of his income or resorts to concealment of income. In New Sorathia Engineering Co vs. CIT (2006) 282 ITR 642 (Guj) it was held that the order of penalty must state whether it is levied for concealment of income or for furnishing inaccurate particulars by the assessee. In the absence of such clear cut finding the order of penalty could not be sustained and accordingly it was held as invalid.
2. In CIT vs. Idhayam Publications Ltd (2006) 285 ITR 221 (Mad) the assessee company received cash loans from a director. It was held that the term ‘deposit’ does not include any amount received from a director or a shareholder of a private limited company as per the Companies (Acceptance of Deposits) Rules, 1975. Hence, it was held that no penalty could be imposed on such transactions.
3. In CIT vs. Tam Tam Pedda Guruva Reddy (2006) 287 ITR 72 (Karn) it was held that the time limit for imposition of penalty must be reckoned from the date of initiation of penal proceedings and not the date of (re)assessment proceedings initiated by the Assessing Officer.
4. In CIT vs. Sri Ram Memorial Education Promotion Society (2006) 287 ITR 155 (All) the assessee was subjected to penalty under section 271 C for failure to deduct tax at source. Again proceedings were initiated for not filing the TDS return in time and for delay in issuing Form No.16 by the assessee. It was held that when the assessee has been subjected to penalty for not deducting tax at source, the penalty for further defaults such as non-filing or delayed filing of TDS return or issue of TDS certificate would not arise.
5. In CIT vs. Andhra Pradesh Yarn Combines (P) Ltd (2006) 282 ITR 490 (Kar) it was held that possession of demonetised high denomination notes is not money and accordingly seizure of the same is not liable for concealment penalty.
6. In Shri Bhagwant Finance Co Ltd vs. CIT (2006) 280 ITR 412 (Del), the Assessing Officer initiated penalty proceedings on the same date as a safeguard for recovery of tax arising due to completion of assessment. The court held that the Assessing Officer is not justified in invoking Sec.271 without recording satisfaction of the fact of concealment or furnishing of inaccurate particulars of income by the assessee.
7. In CIT vs. Valimkbhai H.Patel (2006) 280 ITR 487 (Guj) the assessee engaged in manufacture of salt had loss due to cyclone and rain. The Assessing Officer estimated loss which differed from the loss admitted by the assessee. The assessing officer treated the difference between his estimated loss and loss admitted by assessee as concealment of income. The court held that upon estimation difference, no concealment could be inferred for levy of penalty.
