Gireesh Bhalla : Concealment of income
1) Penalty can be levied only if it is proved
beyond doubt that the assessee has concealed income or furnished inaccurate
particulars thereof. It is necessary for
the authority levying penalty to prove that, (i) there was a concealment of
income, and that (ii) the assessee was conscious of having concealed or
furnished inaccurate particulars of his income.
2) In CIT vs.
Saraf Trading Corporation (1987) 167 ITR 909 (Ker), it was held that the
penalty proceedings are quasi criminal proceedings and there should be
conscious concealment. The findings in
the assessment proceedings are not conclusive but are relevant. The entire material available should be considered
afresh by the authorities before imposing the penalty.
3) The Supreme Court observed “An order imposing
penalty for failure to carry out a statutory obligation is the result of a
quasi criminal proceeding and penalty will not ordinarily be imposed unless the
party obliged, either acted deliberately in defiance of law or was guilty of
conduct contumacious or dishonest or acted in conscious disregard of its
4) CIT vs Shiv
Lal Desai and Sons (1978) 114 ITR 377 (Bom), it was held that merely because
the payment of Rs. 55,000/- has been disallowed in the assessment proceeding of
the assessee, it will not necessarily bring in its wake of levy of
penalty. They held that department had
failed to prove that the assessee was guilty of the offence charged