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alok arunkumar bhagat (PRACTICING LAWYER)     24 October 2008

penalty u/s 271(1)(c)


Please guide me whether the ACIT was right in issuing a notice for penalty u/s 271(1)(c) after scrutiny assessment u/s143(3) and disallowance of expenses in order. Refund is still due to the assessee even after disallowance.??

Alok A. Bhagat




 4 Replies

ca.bhupendrashah (FCADISA)     25 October 2008

mere disallowance of exp is not concealment

alok arunkumar bhagat (PRACTICING LAWYER)     25 October 2008

Thank you sir for your response.

this problem happened in 3 of my cases, all the three ITO disallowed expenses and issued notice for penalty. 

ca.bhupendrashah (FCADISA)     27 October 2008


Sunny Honey (Student)     25 November 2008

Penalty u/s 271(1)(c) of the Income Tax Act, 1961 has its prime objective of providing a deterrent against the reoccurance of default by assessee. Penalty u/s 271(1)(c) can be levied in case of a)concealment of particulars by assessee in his return of income b)furnishing of inaccurate particulars pertaining to such return of income. It is a civil liability, and can  be levied during the course of assessment proceedings either by AO, or CIT(A), or CIT.Reference can be made in this regard to citations of CIT v/s Indian Metal and Ferroy Alloys Limited (1995) 211 ITR 35 (Orissa High Court) regarding meaning of expressions concealment and furnishing in accurate particulars of return of income, and   A.V.Thomas & Co (India) Limited vs CIT (1966) 59 ITR 499 (Madras High Court)

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