THE KANGRA CENTRAL COOPERATIVE BANK LIMITED,DHARAMSHALA vs. DEPUTY COMMISSIONER OF INCOME TAX, PALAMPUR

Facts

The assessee, a cooperative bank, filed its return of income. The Assessing Officer (AO) made a disallowance regarding provision for standard assets and initiated penalty proceedings under Section 271(1)(c) for concealment of income or furnishing inaccurate particulars.

Held

The Tribunal held that the penalty was levied merely on the basis of the confirmation of disallowance in quantum proceedings. It found no independent and specific finding by the AO to justify the charge of furnishing inaccurate particulars. The Tribunal noted that the assessee made adequate disclosure and the claim, even if found not allowable, does not automatically attract penalty.

Key Issues

Whether the penalty under Section 271(1)(c) can be levied solely based on the confirmation of a disallowance in quantum proceedings, without an independent finding by the AO regarding furnishing of inaccurate particulars of income.