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2021 (7) TMI 137 - ITAT AHMEDABADPenalty u/s 271(1)(c) - addition made on account of cessation of liability and income from other sources - whether the assessee has furnished inaccurate particulars of income and concealed the particulars of income with respect to the above items of addition? - HELD THAT:- The term inaccurate particular of income has not been defined under the provisions of section 271(1)(c) or elsewhere in the Act the Act - the meaning of the term inaccurate has been discussed in the case of Reliance Petroproducts (P) Ltd [2010 (3) TMI 80 - SUPREME COURT] wherein it was held that the term ‘inaccurate’ signifies deliberate act or omission on the part of the assessee. As such, the details/informations contained in the return of income /financial statements /audit report which are not correct according to truth, and were furnished by the assessee with the dishonest intent shall be treated as inaccurate particulars. We find that it cannot be alleged that the assessee has furnished inaccurate particulars of income with respect to the liabilities which ceased to exist in the books as alleged by the Revenue. It is because the assessee in the subsequent year has made the payment of such liabilities. This fact can verified from the copies of the ledgers which are available on record. Accordingly, it cannot be concluded that the assessee has furnished inaccurate particulars of income and thus question of penalty under section 271(1)(c) of the Act does not arise. Addition on account of the money received by the assessee as confirming party - We find that the assessee contended that such receipt was duly recorded in the books of accounts which were subject to audit. The contention of the assessee was not was not challenged by the authorities below. We are of the opinion that the assessee has made sufficient disclosures in the financial statements. Therefore, the assessee should not be penalized on account of the mistake committed by him inadvertently as discussed above. Therefore, we are reluctant to confirm the penalty levied by the authorities below. We feel that there was no deliberate intention/ act on the part of the assessee to furnish the inaccurate particulars of income/ concealing the particulars of income. We also find strength from the fact that the assessee has declared the income in the income tax return and the amount involved in the dispute is of negligible value in comparison to the income. Thus we reverse the order of the authorities below and direct the AO to delete the penalty imposed by him under section 271(1)(c). Ground of appeal of the assessee is allowed.
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