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2014 (7) TMI 298 - AT - Income TaxCancellation of penalty u/s 271(1)(c) of the Act – Held that:- It is the interest payments on the working capital borrowed from the bank which were disallowed by the AO in the course of scrutiny assessments completed, that led to the penalties u/s 271(1)(c) of the Act – assessee has explained the various difficulties that it had to encounter on account of the fact of the concerned accountant and others, who were handling the accounting matters, who left the company, and the hostile relationship between the assessee company and the banker, which prevented it from complying with the requirement of the AO - there was a justifiable reason for the non-compliance from the assessee – thus, there was no justification for the imposition of penalty u/s 271(1)(c) of the Act – merely because a claim made by the assessee is disallowed in the assessment, it cannot lead to the inference of either concealment of income or furnishing of inaccurate particulars of income by the assessee. Also in COMMISSIONER OF INCOME-TAX Versus RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] it has been held that there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false - mere making of a claim by the assessee in the return does not tantamount to furnishing of inaccurate particulars of income, and consequently, every disallowance made in the assessment cannot lead to the inference of concealment – thus, it is not a fit case for imposition of penalty u/s 271(1)(c) of the Act – Decided against Revenue.
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