TMI Blog2021 (9) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly, this ground of appeal raised by the Revenue Department stands dismissed. Penalty u/s 271(1)(c) on the head Repairs of the road not belonging to the Assessee - Commissioner deleted the said penalty on the ground that there is neither the element of concealment of income nor any inaccurate particulars of income furnished in the return - HELD THAT:- Considering the facts as the addition qua repairs and maintenance of assets not belonging to the company , has already been deleted by the Co-ordinate Bench, hence no penalty could survive and consequently the ground no. 2 is dismissed being infructuous. Penalty under the head payments made to the transporters - HELD THAT:- Co-ordinate Bench of the Tribunal vide its order [ 2019 (12) TMI 203 - ITAT RAIPUR ] allowed the ground raised by the Assessee in the said appeal before the Tribunal qua addition under the head payments made to the transporters against which penalty is under consideration and remitted the issue back for statistical purposes to the file of AO for determining the allowability of expenses, hence the penalty imposed by the AO cannot survive. The Ld. DR also did not controvert the said factual positi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduced before the ld.CIT(A) himself by the Assessee. 2. The ld.CIT(A) has erred in law and on facts in cancelling penalty for the repairs of the road not belonging to the Assessee to the extent of ₹ 1,98,81,000/-. 3. The ld.CIT(A) has erred in law and on facts in cancelling the penalty imposed by the AO for ₹ 5801.76 lacs without appreciating the fact that Assessee had failed to furnish complete details of quantity transported and rate charged by the transporters. 3. Facts of the case are already on record, therefore for the sake of brevity the same are not repeated herein. 4. Ground No.1 relates to deletion of penalty by the Ld. Commissioner, imposed by the AO for inadmissible guest house maintenance expenses to the extent of ₹ 2,10,000/-. Having heard the parties and perused the material available on record. Though, the claim of the Assessee qua guest house expenses has not been completely allowed and subjected to addition partly, however, to impose the penalty for furnishing inaccurate particulars of income, it is required to be established that the Assessee offered no explanation, secondly, if explanation is offered, then the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition under the head repairs and maintenance of assets not belonging to the company, was deleted by the Co-ordinate Bench, while relying upon the order of Co-ordinate Bench in ITA no. 187/Jab/2008 as submitted by the Ld. AR. The ld. DR neither refuted the claim of the ld. AR nor finding recorded in the said order. Considering the facts as the addition qua repairs and maintenance of assets not belonging to the company , has already been deleted by the Co-ordinate Bench, hence no penalty could survive and consequently the ground no. 2 is dismissed being infructuous. 6. Ground No.3 relates to the cancellation of penalty imposed by the AO for ₹ 5801.76 lakhs under the head payments made to the transporters . 6.1 The AO imposed the penalty qua addition under the head payments made to the transporters by holding that it is evident from the records that Assessee could not produce the details as required by the Assessing Officer. Therefore, the Assessing Officer has disallowed the expenditure. Non-maintenance of proper details goes to prove that Assessee is furnishing inaccurate particulars of its income. 6.2 The said penalty was deleted by the ld. Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22/NAG/2001 vide order dated 28/02/2002. The Assessee, though, preferred an appeal before the Hon'ble High Court of Chhattisgarh against the sustaining of the said addition, however, it is still pending for adjudication and the Assessee is claiming the expenditure as revenue in nature in the return of income for the A.Y. 2009-10 which has been denied by the AO every year. On the aforesaid observations, the AO disallowed the said expenditure by treating as capital in nature and added back to the total income of the Assessee and also initiated penalty proceedings u/sec. 271(1)(c) of the Act for furnishing inaccurate particulars of income and vide penalty order dated 19/02/2013 imposed the penalty on the said addition by holding as under: - As regards claim for land compensation and rehabilitation, the assessing officer has treated it as capital expenditure and this stand of the Department was upheld by the appellate authorities (upto tribunal) in earlier years also. By claiming the deduction under the garb of revenue expenditure is tantamount to the furnishing of inaccurate particulars. 8.2 The said penalty also came into consideration before the ld. Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Rehabilitation Expenses is not bona fide or substantiated and hence, presumption in Explanation-1 to section 271(1)(c) is attracted. The minimum penalty imposed against the addition is confirmed for furnishing inaccurate particulars of income in the return. Penalty imposed against other additions as discussed above is cancelled. 8.3 The affirmation of penalty by the ld. Commissioner has also been challenged by the Assessee in the instant appeal under consideration. 8.4 The Assessee reiterated the same arguments raised before the authorities below that the legal issue involved in the instant case relates to the treatment of expenditure as capital or revenue in nature. Non-acceptance of claim does not mean wrong claim and by any stretch of imagination, making an incorrect claim in law can tantamount to furnishing of inaccurate particulars of income as held by the Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. [(2010) 322 ITR 158 (SC)]. It was further claimed by the Assessee that there is no evidence of inaccurate particulars furnished by the Assessee before the AO. It is a fact that relevant information has been fully disclosed and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Legislature. 8.9 Even Hon ble Punjab Haryana High Court in the case of CIT vs. M/s. Raj Overseas ( {2011} 336 ITR 261 {P H} ) held that no penalty u/s 271(1) (c) was leviable in respect of the deduction wrongly claimed by the Assessee u/s 80IB of the Act in respect of income from Duty Draw Back. 8.10 The Hon'ble Apex Court in the case of Hindustan Steel Limited vs State of Orissa [1970 SCR (1) 753] has held that a penalty will ordinarily be imposed in cases where the party acts deliberately in defiance of law, or is guilty of contumacious or dishonest conduct, or acts in conscious disregard of its obligation; but not, in cases where there is a technical or venial breach of the provisions of the Act or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute. 8.11 In this case, as the Revenue Department did not find the claim of the Assessee as maintainable and treated the same as Capital in nature as against Revenue in nature claimed by the Assessee and made the addition and consequently imposed the penalty. The Assessee is continuously claiming the said addition as Revenue in Natur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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