Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1969-70 - Whether fact that total income of assessee is below assessable limit is not relevant for purpose of imposing penalty under section 271(1)(c) - Held, yes - In assessment proceedings, certain cash credits were treated as assessee's income from undisclosed sources - IAC taking view that there was concealment of income, imposed penalty under section 271(1)(c) - Tribunal, however, held that even after addition of concealed income, total income of assessee was below assessable limit and, therefore, no penalty was imposable - Whether, in view of aforesaid legal position, Tribunal, was wrong in holding that penalty was not imposable in law - Held, yes FACTS In the assessment proceedings, certain cash credits were treated as income of the assessee from undisclosed sources. In the penalty proceedings, the IAC, found concealment of income and imposed penalty under section 271(1)(c). On appeal, the Tribunal took the view than even after the addition of the concealed income, the total income of the assessee was below the assessable limit and therefore, no penalty was imposable. On reference : HELD All that is required for the imposition of a penalty under clause (c ) of sub-section (1) of the section 271 is that the officer concerned must be satisfied that any person has concealed the particulars of his income, or has furnished inaccurate particulars of such income, in other words, for the purposes of clause (c), there is no need to find any failure to furnish a return or failure to comply with a notice, etc., which are the necessary ingredients under clause (a) and (b). Again in the matter of computation of penalty under clauses (a) and (b) it would be seen that under the sub-clauses (i) and (ii ) after clause (c), the penalty imposed is geared to the tax payable or avoided; whereas in the case referred to under clause (c ), it is not necessarily geared to the tax payable, but is in addition to any tax payable (if no tax is payable this will not enter the reckoning), an amount not more than twice the amount of the income concealed or the inaccurate particulars…

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