TMI Blog2010 (9) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... , Advs. DIPAK MISRA, CJ. In this appeal preferred under Section 260A of the Income Tax Act, 1961 (for brevity "the Act") assailing the order dated 13th February, 2009 passed by the Income Tax Appellate Tribunal, Delhi Bench "B", New Delhi (for short the tribunal‟) in ITA No.2299/Del/2007 pertaining to the assessment year 2001-02 the revenue has raised the following substantial question of law:- 1. Whether the Income Tax Appellate Tribunal was correct in law and on facts in deleting the penalty of Rs.20,22,944/-, imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act? 2. Whether or not the findings recorded by the Income Tax Appellate Tribunal in its order are perverse in law, in as much as it has di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CIT(A), who had expressed the view that the penalty proceedings under Section 271(1)(c) was unwarranted and, accordingly, deleted the penalty imposed on the assessee. 4. Presently to the factual setting. The assessee-respondent filed its return of income on 31st October, 2001 declaring the total income as nil. At the relevant time, the assessee was engaged in the manufacture of flavoured chewing tobacco and kiwam. The manufacturing units are located at Barotiwala (HP) and Agartala. Deduction was claimed under Sections 80-1A and 80-IB of the Act. Eventually, an assessment order was framed under Section 143(3) on 28th February, 2004 determining the income of the assessee at Rs.25,14,97,714/-. The penalty was computed at Rs.51,14,309/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not levy the penalty upon an assessee. For such a view, learned CIT(Appeals) found support from the decision of Hon‟ble Supreme Court in the case of Hindustan Steels Ltd. (supra). The CIT(Appeals) further relied upon the order of the ITAT, Jaipur Bench rendered in the case of Harshvardhan Chemicals Minerals Vs. DCIT 58 Taxman 234. In that case also, the deduction admissible under sec. 80-HH and 80-I was reduced by the Assessing Officer. The ITAT observed that penalty under sec. 271(1)(c) would not be imposable upon the assessee in such situation because computation of deduction admissible under those provisions was a debatable issue. Similar are the facts before us. Allocation of expenses between the head office and the unit would a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was pointed out that the term "inaccurate particulars" was not defined anywhere in the Act and, therefore, it was held that furnishing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. It was further held that the Assessing Officer must be found to have failed to prove that his explanation is not only not bona fide but all the facts relating to the same and material to the computation of his income were not disclosed by him. It was then held that the explanation must be preceded by a finding as to how and in what manner, the assessee had furnished the particulars of his income. The Court ultimately went on to hold that the element of mens rea was essential. It was only on the point of mens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rea was an essential ingredient for the penalty under Section 271(1)(c) that the decision in Dilip N. Shroff v. Joint CIT was overruled. 10. We are not concerned in the present case with the mens rea. However, we have to only see as to whether in this case, as a matter of fact, the assessee has given inaccurate particulars. In Webster‟s Dictionary, the word "inaccurate‟ has been defined as: "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript." 11. We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the return, which are not accurate, not exac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome as well as furnishing of inaccurate particulars of income. We do not agree, as the assessee had furnished all the details of its expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the revenue, that by itself would not, in our opinion, attract the penalty under section 271 (1)(c). If we accept the contention of the Revenue then in case of every return where the claim made is not accepted by the Assessing Officer for any reason, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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