‘Furnishing of inaccurate particulars of Income’ is different from ‘Concealment of Income’ for the purpose of sec. 271(i)(a): Bombay HC [Read Judgment]

In the recent ruling in CIT v. Shri Samson Perinchery, the division bench of the Bombay High Court held that ‘furnishing of inaccurate particulars of income’ is different from ‘concealment of income’ for the purpose of section 271(i)(a) of the Income Tax Act, and the AO is bound to specify that on which ground he is initiating penalty.

The Revenue approached the High Court impugning the Order of the Appellate Tribunal wherein the penalty order issued under section 271(i)(a) was struck down by the Tribunal by finding that the AO has not stated the reason specifically. It was seen that the penalty was imposed for furnishing inaccurate particulars of income while the order imposing penalty is for concealment of income.deleting the order, the Tribunal held that the concealment of income and furnishing inaccurate particulars of income carry different connotations. Therefore, the Assessing Officer should be clear as to which of the two limbs under which penalty is impossible, has been contravened or indicate that both have been contravened while initiating penalty proceedings.

The Revenue contended that there is no difference between furnishing of inaccurate particulars of income and concealment of income. Thus, distinction drawn by the impugned order is between “Tweedledum and Tweedledee”.

Dismissing the plea of the Revenue, the bench comprising of Justice M.S Sanklecha and Justice A.K Menon observed that, “the satisfaction of the Assessing Officer with regard to only one of the two breaches mentioned under Section 271(1)(c) of the Act, for initiation of penalty proceedings will not warrant/ permit penalty being imposed for the other breach. This is more so, as an Assessee would respond to the ground on which the penalty has been initiated/notice issued. It must, therefore, follow that the order imposing penalty has to be made only on the ground of which the penalty proceedings has been initiated, and it cannot be on a fresh ground of which the Assessee has no notice.”

Read the full text of the Judgment below.