Law:

Section:

Section 271(1)(c) of Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1998-99 - Assessing Officer sought to impose penalty on assessee under section 271(1)(c) on ground that certain amount of sales turnover was not brought to account of assessee and was kept outside purview of Income-tax assessment - Assessee explained that sale was completed only in June 1998, when purchaser received goods sold and that mere issuance of invoice and delivery of challan on 31-3-1998, could not be construed as confirmation of sale - Rejecting said explanation, penalty was imposed - It was found that subsequently, in assessment year 1999-2000, assessee voluntarily paid Income-tax for sale receipt in question - Whether on facts, impugned penalty could not be levied and it was to be set aside - Held, yes FACTS The assessee-company filed the return for the assessment year 1998-99 admitting a total income of Rs. 26,52,200. The assessment was completed under section 143(3) determining a total income of Rs. 46,23,676. The enhancement in the income assessed was made because of the addition of Rs. 19,71,481 made by the Assessing Officer on the ground that the sales turnover to that extent was not brought to the account of the assessee and the sales turnover was kept outside the purview of the Income-tax assessment. The assessee explained that even though the sale was effected on 31-3-1998, and it had claimed certain deductions under the General Sales Tax Act, the sale was completed only in June 1998, when the purchaser received the goods sold. The Assessing Officer, however, refused to accept the explanation offered by the assessee as not satisfactory, finding that the assessee raised the sales bill on 31-3-1998, and also filed sales tax return admitting the same as turnover for the month of March, 1998, and paid sales tax for the same. The assessee also paid the Central excise duty applicable and claimed the same as expenditure in the profit and loss account based on the delivery challan prepared by the assessee on 31-3-1998, supported by lorry receipt dated 31-3-1998. Hence, the Assessing Officer imposed penalty under section 271(1)(c). On appeal before the…

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