271(1)(c)

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arti

arti (Querist)
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28 December 2011 Whether penalty u/s. 271(1)(c) can be levied on lump sum disallowance of expenditure?

CA Parth Shah

CA Parth Shah (Expert)
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28 December 2011 Yes if assessee is at question of fact by showing excessive exps and thus supressing the income, 271(1)(c) can definately be invoked.

arti

arti (Querist)
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28 December 2011 Assessing officer can impose penalty on this but is there any counter argument or any case laws in favour of assessee?

Krishna Mohan

Krishna Mohan (Expert)
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28 December 2011 Normally Section 271(1)(c) will not be invoked the AO for each and every expenditure dis-allowed. It should be established that the assessee has claimed expenditure with an intent to evade the tax. So, the concept of "mens era" need to be established to attract this section. Merely the proof the exp. is not submitted like bills etc., the above section cannot be invoked.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 December 2011 Disallowance of an expenditure per se cannot mean that the assessee has furnished inaccurate particulars of its income,hence penalty u/s 271(1)(c) will not sustain.

Citation :- CIT V Ajaib Singh & Co (2002) 253 ITR 630 (P&H).

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CA Parth Shah

CA Parth Shah (Expert)
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29 December 2011 Hi All,
I clerified before that if at all the diallowance of expense and hence supression of income is Question of Fact and thatis established by Authority, then only sec 271(1)(c) can be invoked.
Mere disallowance of expense does not attract the same.

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