For the imposition of penalty u/s 271(1)(c) of the Act either concealment of particulars of income or furnishing inaccurate particulars of such income are since qua non – ITAT Delhi

M/s Aryahi Buildwell Pvt Ltd. vs ACIT

ITA No. 139/Del/2017

Pronounced on 16.12.2020

In the recent case, it was observed by the Hon’ble ITAT that ” no clear satisfaction has been recorded by the AO as to whether it was a case of furnishing inaccurate particulars of income or it was the case of concealment of income. It is a settled law that while levying penalty for concealment, the AO has to record satisfaction and thereafter come to a finding in respect of one of the limbs, which is specified under section 271(1)(c) of the Act.”

It is a settled law that penalty cannot be imposed for alleged breach of one limb of Section 271(1)(c) while penalty proceedings are initiated for breach of other limb of the section.

Facts of the Case: 

1. The Assessing Officer make a disallowance of Rs. 1,74,966/- u/s 14A read with rule 8D.
2. On the aforesaid disallowance u/s 14A, AO vide order dated 31.08.2015 levied the penalty of Rs.56,768/- u/s 271(1)(c) of the Act.
3. It was find that the assessee has raised several grounds but the sole controversy is with respect to levy of penalty u/s 271(1)(c) of the Act.
4. In the present case, the perusal of the assessment order reveals that no clear satisfaction has been recorded by the AO as to whether it was a case of furnishing inaccurate particulars of income or it was the case of concealment of income.

To Read Complete Judgment , M/s. Aryahi Buildwell Pvt. Ltd. ITA no. 139/Del/2017