Section 271(1)(c) of the Income Tax Act

The decision most relied on for Section 271(1)(c) is CIT v. Manjunatha Cotton & Ginning Factory (359 ITR 565), cited in 2,590 of the 25,141 judgments on BharatTax that turn on this section.

Leading authorities on Section 271(1)(c)

CIT v. Manjunatha Cotton & Ginning Factory
359 ITR 565 · 2013 · High Court
2,590
citing judgments

A penalty notice issued under section 274 read with section 271(1)(c) is invalid if it fails to specify whether the penalty proceedings are initiated for concealment of income or for furnishing inaccurate particulars of income. This non-specification vitiates the penalty proceedings.

CIT v. Reliance Petroproducts Pvt. Ltd.
322 ITR 158 · 2010 · Supreme Court
2,228
citing judgments

Penalty under Section 271(1)(c) for furnishing inaccurate particulars or concealment of income is not automatically leviable if the assessee has made a full disclosure of all particulars and the addition or disallowance arises from a difference of opinion.

Godrej & Boyce Mfg. Co. Ltd. v. DCIT
328 ITR 81 · 2010 · High Court
1,183
citing judgments

Rule 8D, for computing disallowance under Section 14A for expenses related to exempt income, applies from Assessment Year 2008-09 onwards; for prior years, a reasonable disallowance must be made. The disallowance under Section 14A cannot exceed the actual exempt income earned.

CIT v. SSA’s Emerald Meadows
73 Taxmann.com 248 · 2016 · Supreme Court
953
citing judgments

A notice issued under Section 274 read with Section 271(1)(c) is invalid if it fails to specify whether penalty proceedings are for concealment of particulars of income or furnishing inaccurate particulars of income. Such lack of specificity vitiates the penalty proceedings.

Ashok Pai v. CIT
292 ITR 11 · 2007 · Supreme Court
812
citing judgments

“Concealment of particulars of income” and “furnishing inaccurate particulars of income” are two distinct offences under Section 271(1)(c) of the Income Tax Act. A penalty cannot be levied under one limb if the show cause notice or basis for penalty specifies the other, as this constitutes a complete variance in the reasons for assuming jurisdiction.

CIT v. SSA’s Emerald Meadows
73 Taxmann.com 241 · 2016 · High Court
791
citing judgments

A penalty notice under section 271(1)(c) read with section 274 of the Income Tax Act is invalid if it fails to specify whether the penalty is for concealment of income or for furnishing incorrect particulars of income.

CIT v. Jet Airways (I) Ltd.
331 ITR 236 · 2011 · High Court
694
citing judgments

The Assessing Officer loses jurisdiction and the entire reassessment becomes invalid if no addition is made in respect of the income that formed the basis of the reopening. Explanation 3 to Section 147 does not permit assessing other escaped income unless an addition is made for the original income forming the reason to believe.

Mr. Mohd. Farhan A. Shaikh v. ACIT
434 ITR 1 · 2021 · High Court
672
citing judgments

A penalty notice issued under section 274 read with section 271(1)(c) is invalid if it fails to specify the exact charge by not striking off the irrelevant limb (concealment of income or furnishing inaccurate particulars of income). Such an omnibus or vague notice renders the penalty proceedings bad in law, and any penalty imposed on its basis is liable to be quashed.

Empire Jute Co. Ltd. v. CIT
124 ITR 1 · 1980 · Supreme Court
622
citing judgments

Expenditure is classified as revenue or capital based on its practical business effect, necessity, or expediency, rather than solely on the juristic classification of rights; an enduring benefit does not automatically make an expenditure capital if it facilitates trading operations or business efficiency.

Dilip N. Shroff v. JCIT
291 ITR 519 · 2007 · Supreme Court
565
citing judgments

A penalty notice issued under Section 271(1)(c) is invalid if the Assessing Officer fails to strike out the inapplicable limb (concealment or furnishing inaccurate particulars) from the standard proforma, indicating non-application of mind. The initial burden of proving concealment or inaccurate particulars rests on the Revenue.

Judgments on Section 271(1)(c)

M/S. Snowtex Investment Ltd., Kolkata vs. Income Tax Officer, Kolkata

In the result the appeal of the assessee, is allowed

ITA 1347/KOL/2016[2008-09]Status: DisposedITAT Kolkata17 Jan 2018AY 2008-09

Bench: Hon’Ble Sri N.V. Vasudevan, Jm & Dr. Arjun Lal Saini, Am] I.T.A No.1347/Kol/2016 Assessment Year : 2008-09 M/S. Snowtex Investment Ltd. -Vs.- Ito, Wd-12(3), Kolkata Kolkata [Pan : Aaecs 0334 C ] (Appellant) (Respondent) : Shri S. K. Tulsiyan, Advocate For The Appellant For The Respondent : Shri S. Dasgupta, Addl.Cit Date Of Hearing : 04.12.2017. Date Of Pronouncement : 17/01/2018 Order Per Dr. A.L. Saini, Am This Is An Appeal By The Assessee Against The Order Dated 19.04.2016 Of Cit(A)-4, Kolkata Relating To A.Y.2008-09. 2. In This Appeal, The Assessee Has Challenged The Order Of Cit(A) Whereby The Cit(A) Confirmed The Order Of Ao Imposing Penalty On The Assessee U/S 271(1)(C) Of The Income Tax Act, 1961 (Act). 3. The Facts & Circumstances Under Which Penalty U/S 271(1)(C) Of The Act Was Imposed On The Assessee Was That During The Assessment Year 2008-09, The Assessee Has Advanced Interest Free Loans To The Extent Of Rs.9,58,95,000/- & As There Had Been No Significant Repayment, The Closing Balance As On 31.03.2008 Was At Rs. 9,62,95,000/-. It Was Also Seen From The Details For A.Y. 2009-10, That There Had Been No Business Transactions Apart From Interest Free Loan Transactions. The Unsecured Loans On Which Interest Was Paid, Was Rs. 5,92,05,572/-, Which Was Much Below The Amount, Which Was Advanced By The Assessee Free Of Any Interest. Therefore, There Had Been No Justification Of Unsecured Loan Taken During The Year. Therefore, Whole Sum Of Interest Paid Of Rs. 62,84,112/- Was Disallowed. The Cit(A) Restricted The M/S. Snowtex Investment Ltd.

For Respondent: Shri S. Dasgupta, Addl.CIT
Section 271(1)Section 271(1)(c)Section 274Section 41(1)

DCIT, Cir-4(1), Kolkata vs. M/S Bandhan Financial Services Pvt. Ltd., Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 1348/KOL/2015[2010-2011]Status: DisposedITAT Kolkata17 Jan 2018AY 2010-2011

Bench: Shri N.V.Vasudevan & Dr.A.L. Sainiassessment Year :2010-11 Dcit, Central Circle- V/S. M/S Bandhan Financial 4(1), Services Pvt. Ltd., 17/30, Aayakarbhavanpoorva, Dakshindari Road, Lake 110, Shanti Palli, E.M. Town, Kolkat-48 By Pass, 4Th Floor, [Pan No.Aabcg 0611 R] Kolkata-107 अपीलाथ" /Appellant ""थ"/Respondent .. अपीलाथ"की ओर से/By Appellant Shri S. Dasgupta, Addl. Cit-Dr ""थ" की ओर से/By Respondent Shri Shikha Agarwal, Aca सुनवाई की तारीख/Date Of Hearing 11-12-2017 घोषणा की तारीख/Date Of Pronouncement 17/01/2018 आदेश/O R D E R Per Dr. A.L. Saini:- This Caption Appeal Filed By The Revenue, Pertaining To Assessment Year 2010-11, Is Directed Against The Order Passed By The Commissioner Of Income Tax (Appeals)-4, Dated 07.08.2015, Which In Turn Arises Out Of A Penalty Order Passed By The Assessing Officer Under Section 271(1) (C ) Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’), Vide His Order Dated 26.09.2013. 2. In This Appeal, The Revenue Has Challenged The Order Of Ld.Cit(A) Whereby The Ld.Cit(A) Deleted The Order Of Ao Imposing Penalty On The Assessee U/S 271(1)(C) Of The Income Tax Act, 1961 (Act).

Section 271(1)Section 271(1)(c)Section 274

Starlight Hospitality Pvt. Ltd. (Now Known As Damask Infracon Pvt. Ltd.), Mumbai vs. ACIT Cent Cir. 37, Mumbai

In the result, the appeal filed by the assessee is hereby ordered to be allowed

ITA 2295/MUM/2016[2010-11]Status: DisposedITAT Mumbai17 Jan 2018AY 2010-11

Bench: Shri Rajendra, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.2295/Mum/2016 (निर्धारण वर्ा / Assessment Year: 2011-12) बिधम/ M/S. Starlight Hospitality Acit Central Circle-37 Pvt. Ltd. (Now Known As Vs. Mumbai Damask Infracon Pvt. Ltd.) M/S. Thar & Co., Chartered Accountants, 203, Capri Building, Opp. Hdil Tower, Anant Kanekar Marg, Bandra-East, Mumbai-400051 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aalcs7231D (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Assessee By: Shri Virag Shah Revenue By: Shri Vidhyadhar सुनवाई की तारीख / Date Of Hearing: 11.12.2017 घोषणा की तारीख /Date Of Pronouncement: 17. 01.2018 आदेश / O R D E R Per Amarjit Singh, Jm: The Assessee Has Filed The Present Appeal Against The Order Dated 26.02.2016 Passed By The Commissioner Of Income Tax (Appeals)-53, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The A.Y. 2010-11 Wherein The Penalty Levied By The Ao By Virtue Of Order Dated 27.06.2013 Has Been Confirmed.

For Appellant: Shri Virag ShahFor Respondent: Shri Vidhyadhar
Section 115JSection 139Section 143(3)Section 201Section 271(1)Section 271(1)(c)Section 40