penalty u/s 271 c

Querist : Anonymous (Querist) 22 January 2011 This query is : Resolved
As such agriculture income is not totally varifiable,hence to plug revenue leakage a lumpsum addition of Rs. 300000/- is made u/s 68 treating this amount as unexplained cash credits.
Now A O has issued S C Notice u/s 274 r.w.s 271(1)(c).

Kindly Guide and quote case laws so that we can reply.

Thanks

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soumitra basu (Expert) 23 January 2011
If appears that no appeal has been preferred in against of this addition. However, not filing an appeal and aggreeing to addition do not ipso facto mean that the assessee aggreed to treat this amount as concealed income.

Vineet (Expert) 24 January 2011
Every addition or disallowance does not warrant levy of penalty for concealment u/s 271(1)(c). Has the AO been able to make out a case that taxable or unaccounted income was misrepresented as agricultural income with proven facts and evidences? Or is it a csae of convenience additon for want of total verification on part of failure of AO to prove the same. Much depends upon the facts.

Refer to Supreme Court decision dated 17-3-2010 in case of Reliance Petro Products (P) Ltd 230 CTR 320.

Jagmohan Rawat (Expert) 24 January 2011
I agree with Vineet. It is an admitted fact that in case any addition is made on the basis of opinion and not supported by evidence penalty u/s 271(1)(c) cannot be levied. Cases can be easily found in this regard. Only actual facts in your case should not be against you i.e. addition is not opinion based.

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