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)

ITO, New Delhi vs. Sh Umesh Chandra Rustagi, New Delhi

The appeal is dismissed

ITA 3179/DEL/2010[2007-08]Status: DisposedITAT Delhi21 Dec 2015AY 2007-08

Bench: Shri I.C. Sudhir & Shri L.P. Sahu Assessment Year: 2009-10 Ito, Vs. Umesh Chandra Rustagi, Ward 47(2), F-57, Preet Vihar, New Delhi. New Delhi. (Pan: Aagpr4178N) (Appellant) (Respondent) Assessee By: Shri Ved Jain, Ca Department By: Shri Manoj K. Chopra, Sr. Dr Date Of Hearing : 01 .10.2015 Date Of Pronouncement: 21 :12.2015 Order Per I.C. Sudhir:The Revenue Has Questioned First Appellate Order On The Following Grounds: “On The Facts & In The Circumstances Of The Case & In Law, The Learned Cit(Appeals) Has Erred In I) Deleting The Addition Of Rs.2,67,01,204 Made By The A.O. On Account Of Income From Long Term Capital Gain, Accepting The Assessee’S Version & Without Appreciating The Reasons For The Addition Mentioned By The A.O. In The Assessment Order; Ii) Holding That The Claim Of The Assessee That He Received Only 15% Share Of The Said Capital Gain Is Backed By Documentary Evidence Without Mentioning The Said Evidence & More So The Registered Sale Deed Of The Property Under Consideration & Dda’S Document (Conveyance Deed Dated 30.10.2006) Vehemently Supports The Fact That The Assessee’S Share In The Said Capital Gain Is 50% & Not 15% & The Basis Of Assessee’S Claim, The Deed Of Settlement Dated 09.02.2007 Is A Self Serving Document Only; Iii) Directing The A.O. To Allow The Cost Of Improvement/Additions For Working Out The Value Of Capital Gain Ignoring The Fact That The Assessee Could Not Produce Any Supporting Documentary Evidence In This Regard.

For Appellant: Shri Ved Jain, CAFor Respondent: Shri Manoj K. Chopra, Sr. DR
Section 143(3)

Asst CIT Cen Cir 43, Mumbai vs. Pravin S. Jain, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 4005/MUM/2014[2010-11]Status: DisposedITAT Mumbai16 Dec 2015AY 2010-11

Bench: Shri D. Karunakara Rao & Shri Amarjit Singhi.T.A. No.4005/M/2014 (Assessment Year: 2010-2011) फनाभ/ Acit, Central Circle 43, Mr. Pravin S. Jain, R.No.659, 6Th Floor, 203, Kalbadevi Road, Vs. 104, 1St Floor, Mumbai- Aayakar Bhavan, M.K. Road, Mumbai-20. 400002. स्थामी रेखा सं./ Pan : Aabpj2451M (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) अऩीराथी की ओय से / Appellant By : Shri Daya Sagar, Cit-Dr प्रत्मथी की ओय से/ Respondent By : Shri Manish Sanghavi सुनवाई की तायीख / Date Of Hearing : 01.12.2015 घोषणा की तायीख /Date Of Pronouncement : 16.12.2015 आदेश / O R D E R Per D. Karunakara Rao, Am: This Appeal Filed By The Revenue On 2.6.2014 Is Against The Order Of The Cit (A)-38, Mumbai Dated 27.2.2014 For The Assessment Year 2010-2011. 2. The Core Issue Raised In This Appeal Relates To The Levyabilty Of Penalty U/S 271Aaa Of The Act When There Is No Warrant In The Name Of The Assessee Initiating Search & When The Assessments Were Made U/S 153C Of The Act. Briefly Stated Relevant Facts Of The Case Are That There Was A Search Action In The Case Of Shri Hasmukh Jokmal Jain & Shri Indramal Solanki On 8.5.2009. Subsequent To The Search Action, There Was A Survey U/S 133A Of The Act On The Premises Of The Assessee, Who Is A Proprietor Of M/S. Darshan Gold, A Proprietary Concern. It Is An Undisputed Fact That The Assessments In The Case Of The Assessee Were Completed U/S 153C Of The Act & Not U/S 153A Of The Act. 3. With The Background Of The Above Facts, Ld Counsel For The Assessee Demonstrated That The Penalty Proceedings Initiated U/S 271Aaa Of The Act In The Case Of The Assessee & Levied Penalty Of Rs. 20 Lakhs. In This Regard, Ld Counsel

For Appellant: Shri Daya Sagar, CIT-DRFor Respondent: Shri Manish Sanghavi
Section 132Section 132(4)Section 133ASection 153ASection 153CSection 271(1)(c)Section 271A

ITO 15(2)(4), Mumbai vs. Om Namah Shivay Enterprises, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 6371/MUM/2013[2007-08]Status: DisposedITAT Mumbai16 Dec 2015AY 2007-08

Bench: Shri D. Karunakara Rao & Shri Amarjit Singhi.T.A. No.6371/M/2013 (Assessment Year: 2007-2008) फनाभ/ Ito-15(2)(4), Om Namah Shivay Matru Mandir, R.No.111, Enterprises, Shop No.6, Raj Vs. Grant Road (W), Umang Ii, Ashokvan Dahisar Mumbai – 400 007. East, Mumbai-400068. स्थामी रेखा सं./ Pan : Aabfo0605J (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) अऩीराथी की ओय से / Appellant By : Shri Durga Datt, Dr प्रत्मथी की ओय से/ Respondent By : None सुनवाई की तायीख / Date Of Hearing : 01.12.2015 घोषणा की तायीख /Date Of Pronouncement : 16.12.2015 आदेश / O R D E R Per D. Karunakara Rao, Am: This Appeal Filed By The Revenue On 30.10.2013 Is Against The Order Of The Cit (A)-26, Mumbai Dated 18.5.2011 For The Assessment Year 2007-2008. 2. The Only Issue Involved In This Appeal Relates To The Levy Of Penalty U/S 271(1)(C) Of The Act. Before Us, Despite Service Of Notice & The Intimation To The Assessee, None Represented For The Assessee. With The Help Of The Ld Dr For The Revenue, We Proceed To Adjudicate The Appeal On Merits. 3. Ld Dr For The Revenue Briefly Narrated The Facts As Well As Merits Of The Case & Stated The Revenue Is Aggrieved Against The Order Of The Cit (A), Who Deleted The Said Penalty Of Rs. 7,42,041/-. In The Assessment, Ao Made Addition Of Rs. 22,04,604/- U/S 40(A)(Ia) Of The Act. Further, Ao Also Made Another Addition On Account Of „Interest‟ Of Rs. 71,078/- On The Debit Balances In The Partners‟ Account Of The Firm. Ao Estimated The Interest Applying The Flat Rate Of 12% On Ad-Hoc Basis. Subsequently, Ao Initiated Penalty Proceedings & Levied Penalty Of Rs. 7,42,071/-. On Appeal, Cit (A) Deleted The Same Vide His Order Dated 22.8.2013. While Deleting

For Appellant: Shri Durga Datt, DRFor Respondent: None
Section 271(1)(c)Section 40

Mahindra Realty & Infrastructure Developoers ( Since Merged With Mahindra Engg & Chemical Products Ltd), Mumbai vs. DCIT Cir 2(2), Mumbai

In the result, appeal of assessee is allowed

ITA 6122/MUM/2012[2002-03]Status: DisposedITAT Mumbai16 Dec 2015AY 2002-03

Bench: Shri R.C.Sharma, Am & Shri Ram Lal Negi, Jm आमकय अऩीर सं./Ita No.6122/Mum/2012 (नििाारण वषा / Assessment Year :2002-2003 Mahindra Realty & Vs. Dcit, Circle-2(2), Mumbai- Infrastructure Developers 20 Limited (Since Merged With Mahindra Engineering & Chemical Products Ltd.) Gateway Building, Appollo Bunder, Mumbai-400001 स्थामी रेखा सं./ जीआइआय सं./ Pan/Gir No. : Aaacm 4116 G (अऩीराथी /Appellant) (प्रत्मथी / Respondent) .. ननधाारयती की ओर से /Assessee By : Shri H.P.Mahajani याजस्व की ओर से /Revenue By Shri N.P.Singh : सुनवाई की तायीख / Date Of Hearing : 16/12/2015 घोषणा की तायीख/Date Of Pronouncement 16/12/2015 आदेश / O R D E R Per R.C.Sharma (A.M): This Is An Appeal Filed By The Assessee Against The Order Of Cit(A)- Mumbai, Dated 26-7-2012, For The Assessment Year 2002-2003, In The Matter Of Imposition Of Penalty U/S.271(1)(C) Of The I.T.Act. 2. Ld. Ar Placed On Record Order Of The Hon’Ble Bombay High Court Wherein Substantial Question Of Law Has Been Admitted With Regard To The Additions Confirmed By The Tribunal. He Further Relied On The Following Judicial Pronouncements In Support Of The Proposition That No Penalty Should Be Imposed When Substantial Question Of Law Had Been Admitted By High Court :- I) Nayan Builders & Developers

For Appellant: Shri H.P.Mahajani
Section 14ASection 2Section 271(1)Section 271(1)(c)Section 50B

Mahindra Engineering & Chemicals Products Ltd, Mumbai vs. DCIT Cir 2(2), Mumbai

In the result, appeal of assessee is allowed

ITA 6121/MUM/2012[2000-01]Status: DisposedITAT Mumbai16 Dec 2015AY 2000-01

Bench: Shri R.C.Sharma, Am & Shri Ram Lal Negi, Jm आमकय अऩीर सं./Ita No.6122/Mum/2012 (नििाारण वषा / Assessment Year :2002-2003 Mahindra Realty & Vs. Dcit, Circle-2(2), Mumbai- Infrastructure Developers 20 Limited (Since Merged With Mahindra Engineering & Chemical Products Ltd.) Gateway Building, Appollo Bunder, Mumbai-400001 स्थामी रेखा सं./ जीआइआय सं./ Pan/Gir No. : Aaacm 4116 G (अऩीराथी /Appellant) (प्रत्मथी / Respondent) .. ननधाारयती की ओर से /Assessee By : Shri H.P.Mahajani याजस्व की ओर से /Revenue By Shri N.P.Singh : सुनवाई की तायीख / Date Of Hearing : 16/12/2015 घोषणा की तायीख/Date Of Pronouncement 16/12/2015 आदेश / O R D E R Per R.C.Sharma (A.M): This Is An Appeal Filed By The Assessee Against The Order Of Cit(A)- Mumbai, Dated 26-7-2012, For The Assessment Year 2002-2003, In The Matter Of Imposition Of Penalty U/S.271(1)(C) Of The I.T.Act. 2. Ld. Ar Placed On Record Order Of The Hon’Ble Bombay High Court Wherein Substantial Question Of Law Has Been Admitted With Regard To The Additions Confirmed By The Tribunal. He Further Relied On The Following Judicial Pronouncements In Support Of The Proposition That No Penalty Should Be Imposed When Substantial Question Of Law Had Been Admitted By High Court :- I) Nayan Builders & Developers

For Appellant: Shri H.P.Mahajani
Section 14ASection 2Section 271(1)Section 271(1)(c)Section 50B