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2005 (12) TMI 458 - AT - Income TaxPenalty levied u/s 271(1)(c) - For concealment of income - HELD THAT:- We are of the opinion that mere rejection of a legal claim of the assessee for taxability of income under a particular head of income is not by itself sufficient to warrant imposition of penalty. Tax matters are highly complex and hence there is bound to be a genuine difference of opinion in matters of law between the tax collectors and the taxpayers. It is indeed very difficult for the assessee to predict, in advance, as to what view the Assessing Officer or appellate authorities would take on the legal claim made by the assessee. Cases involving genuine difference of opinion on matters of law between the assessee and the Assessing Officer are clearly outside the scope of Explanation 1 to section 271(1) provided the assessee has made full disclosure of all the relevant facts and also acted bona fide. Tested on the aforesaid parameters, we feel that the learned CIT(A) has correctly cancelled the impugned penalty. His order is, therefore, confirmed. Appeal filed by the Department is dismissed.
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