Penalty u/s 271(1)(c) is to be imposed if the assessee’s disclosure is not voluntary but under compulsion and he fails to offer any explanation at the assessment stage or at the penalty proceedings

Manjit Singh Vs ITO

Whether penalty u/s 271(1)(c) is to be imposed if the assessee’s disclosure is not voluntary but under compulsion and he fails to offer any explanation at the assessment stage or at the penalty proceedings – YES : ITAT

– Assessee’s appeal dismissed: DELHI ITAT

Whether penalty u/s 271(1)(c) is to be imposed if the assessee’s disclosure is not voluntary but under compulsion and he fails to offer any explanation at the assessment stage or at the penalty proceedings – YES : ITAT

++ it is an admitted fact that the case was selected for scrutiny and A.O. raised questionnaire to the assessee. The assessee instead of explaining any of the issues or to file any documentary evidences in support of the same, surrendered the amounts in question for taxation. It would, therefore, clearly show that assessee made the surrender of the amounts in question only when A.O. has confronted the assessee. Thus, the assessee did not make any voluntary surrender of the amounts in question. The facts clearly show that assessee had concealed the material facts and given incorrect statement of fact in the return of income. The assessee provided incorrect facts which were marshaled by the A.O. It would show that assessee’s disclosure was not voluntary but under compulsion when cornered by the A.O. at the assessment stage. The assessee did not offer any explanation at the assessment stage or at the penalty proceedings. Thus, Explanation-1 to Section 271(1)(c) of the I.T. Act is clearly attracted. Had the case would not have been selected for scrutiny assessment, the assessee would not have surrendered the amount in question for the purpose of taxation. The assessee, therefore, had guilty mind and show that assessee concealed the particulars of income from the Revenue Department which invited penalty proceedings under section 271(1)(c) of the I.T. Act, 1961. In the result, appeal of Assessee dismissed.

ITA No.6098/Del./2017