Penalty u/s 271(1)(c) of the Income tax act, 1961, if the Assessing officer or the Commissioner of Income tax (Appeals) during the course of the Assessment proceedings under the Act is satisfied that any person has concealed or furnished inaccurate particulars of income.
Above provisions of the section clarifies that:
(a) The penalty could only be levied by the Assessing officer and/or the Commissioner of Income Tax (Appeals) and not higher authorities to that such as Income tax Appellant Tribunal, High court and Supreme Court.
(b) It would only be levied during the Assessment proceedings under the Income Tax Act, 1961.
(c) The penalty is in addition to the tax, if any payable by the Assessee.
(d) Penalty could not be levied where the total income of the Assessee is in negative i.e. loss after the completion of the Assessment proceedings under the Income Tax Act, 1961.
| Section | Nature of default | Minimum penalty | Maximum penalty |
| (1) | (2) | (3) | (4) |
| 271(1)(c) | Concealment of particulars of income or furnishing of inaccurate particulars of income | 100% of tax sought to be evaded | 300% of amount of tax sought to be evaded |
The words ‘concealed’ or ‘furnished inaccurate particulars of income’ has been defined neither in this section nor any where else of the act.
- The word ‘conceal’ signifies a deliberate act of omission of the part of the assesse. A mere omission or negligence would not constitute a deliberate act Suppressio veri or Suggestio falsi – T. Ashok Pal Vs. CIT (2007) 161 Taxman 340, 292 ITR 11 (SC).
- The words ‘furnished inaccurate particulars of income’ refer to the particulars which have been furnished by an assessee of his income and the requirements of concealment of income is that income has not been declared at all or is not even recorded in the books of account or in a particular case the concealment of the particulars of income may be from the books of accounts as well as from the furnished – CIT Vs. Raj Trading Co. (1996) 217 ITR 208, 86 Taxman 282 (Raj).
Reference:
Section 271(1)(c), of Income tax act, 1961-
Failure to furnish returns, comply with notices, concealment of income, etc., u/s 271(1)(c)
If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedings under this Act, is satisfied that any person—
(c) has concealed the particulars of his income or furnished inaccurate particulars of such income.