Has Penalty u/s 271(1) (c) become a mandatory result of Non filing of Quantum Appeal?

It has become a common mindset to make the Assessee liable to Penalty u/s 271 (1) (c) in all the cases in which he/she abstains from filing an appeal, keeping a hope of ending the horrible dream  which starts with choosing of the case for audit by accepting the general additions in the Assessment order. The content and peace that he won’t have to face any unforeseen enhancement from a forum reached from justice in Appeal aren’t abiding as then starts the show cause notice for the penalty.

Appeal against Income Tax Order
Appeal against Income Tax Order

The penalty is right away assessed and imposed because no appeal filed against the quantum order isn’t a new anomaly in the Dept. Only the Judiciary can check the abuse of power & blindfolded method though after passing through the whole method of long drawn case which was required to be dodged or resisted at the first case by not filing any appeal.

What is the reason that the assessee doesn’t file an appeal against the quantum order in case he/she is assured and certain that there’s no evasion, no concealment, and no wrong doing?

This question has been correctly answered by Supreme Court itself in the case of Sir Shadilal Sugar Mills, holding that there can be a number of reasons for not agreeing and not protesting to the addition. However, that doesn’t get to the conclusion that the price agreed upon to be added was a hidden income. Undeniably, a taxpayer can have a number of reasons for not coming to the first appellate authority for appeal, as for example:

  • For avoiding the pains of mental tensions, numerous hearings and further litigations which come with it.
  • The danger of enhancement at the 1st appellate authority on different technical problems.
  • The attitude of the assessment in Appellate proceedings commonly seen these days.
  • High cost of litigation of representatives.
  • Appeal withdrawal at Assessee instance is the prudence of Appellate authority.
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This having been said, what is the justification or explanation available against the disciplinary weapon of destruction? The answer is by first causing awareness in the affiliation on the law which exists in the form of administrative and legal pronouncements and additionally by taking this light of declarations and statements in our reply to the penalty notices.

Hence, it is clear that neither the Assessment order is concluding and makes automated way for penalty nor the appeal’s non-filing causes any bigotry to the case of Assessee in debars or penalty from competing for the questionable nature of his/her bonafide and claim.