#concealment of income

ITAT Delhi sets aside a ₹12.91 lakh penalty under Section 271(1)(c) for failing to specify whether the charge was for concealment of income or furnishing inaccurate particulars. The ruling reinforces that tax authorities must clearly articulate the limb of the penalty provision invoked, impacting all penalty proceedings under the Income Tax Act.

When a coordinate bench of the ITAT deletes the taxable addition that formed the basis of a penalty under Section 271(1)(c), the penalty cannot stand - even if the original assessing officer or CIT(A) found concealment. This ruling reinforces that penalties for concealment require a valid, subsisting addition, not just procedural findings. Taxpayers and practitioners now have clearer precedent to challenge penalties tied to overturned income assessments.

ITAT Ahmedabad rules that penalty under Section 271(1)(c) cannot be imposed merely for a disallowed claim unless there is evidence of factual falsity or deliberate concealment. The tribunal set aside a ₹12.96 lakh penalty, emphasizing that audited accounts and disclosed claims negate allegations of inaccurate particulars.

The ITAT Nagpur has ruled that penalty proceedings under Section 271(1)(c) are contingent upon a final and concluded assessment, as the foundation for alleging concealment or inaccurate particulars cannot exist while the quantum remains open. This reinforces natural justice in tax litigation and protects assessees from premature punitive action before their liability is definitively determined.

ITAT Mumbai rules that penalty under Section 271(1)(c) cannot be imposed merely on estimated additions unless concealment of income is proven. The decision clarifies that additions based on gross profit rates or suspected accommodation entries do not meet the legal threshold for penalty, protecting taxpayers from arbitrary penal action.