Section 115JC of the Income Tax Act
The decision most relied on for Section 115JC is CIT v. Shri Samson Perinchery (392 ITR 4), cited in 417 of the 71 judgments on BharatTax that turn on this section.
Leading authorities on Section 115JC
A penalty levied under section 271(1)(c) of the Income-tax Act is unsustainable if it is initiated on one limb (e.g., concealment of income) but ultimately levied on the other limb (e.g., furnishing inaccurate particulars). This also applies if the initial penalty notice is vague or ambiguous regarding the specific charge.
Sun Export Corporation held that any ambiguity in a tax exemption provision or notification must be interpreted in favor of the assessee or the subject.
For the applicability of Section 271(1)(c) penalty, the Assessing Officer must be satisfied that the assessee concealed income or furnished inaccurate particulars; however, this satisfaction is not required to be recorded in a particular manner or reduced to writing.
For the imposition of penalty under section 271(1)(c), the specific conditions laid down in the section must be demonstrably met. The assessee's filed return is the primary document for furnishing income particulars, and inaccuracies therein are crucial for penalty imposition.
A notice imposing penalty under section 271(1)(c) of the Income Tax Act is invalid if it shows non-application of mind by the Assessing Officer regarding the specific grounds for levying the penalty.
Eligibility criteria in an exemption notification must be strictly construed, but once satisfied, the notification should be liberally interpreted.
Penalty under section 271(1)(c) cannot be levied when additions or disallowances are made under normal provisions but tax is levied under Minimum Alternate Tax (MAT) provisions (Sections 115JB/115JC), as no tax is sought to be evaded in such a scenario.
The Commissioner can initiate proceedings under section 263 if the Assessing Officer makes an assessment without proper application of mind or without conducting necessary inquiries, especially when such inquiries were warranted by the facts.
