2012 (12) TMI 1179 - AT - Income Tax

Summary

Issues involved: Appeal against penalty u/s 271(1)(c) of the Income Tax Act, 1961.

Summary:

Issue 1: Levy of penalty u/s 271(1)(c) of the Act

The appeal was filed against the penalty levied u/s 271(1)(c) of the Act amounting to Rs. 11 lacs. The assessee had voluntarily surrendered Rs. 1 crore during a survey operation, which was treated as income from other sources and deduction under section 80IB of the Act was denied. The Assessing Officer held the assessee liable for penalty u/s 271(1)(c) for furnishing inaccurate particulars of income. The CIT (Appeals) upheld the penalty, leading to the appeal. The assessee argued that the claim for deduction was based on the advice of a Chartered Accountant and differences in opinion do not warrant penalty. However, the authorities relied on precedents to support the penalty imposition.

Issue 2: Bonafide nature of the claim

The tribunal found that the surrendered income was not business income but income from other sources, as per sections 69A, 69B, and 69C of the Act. The denial of deduction under section 80IB was considered as furnishing inaccurate particulars of income, leading to the penalty imposition. The tribunal emphasized that a claim needs to be bonafide, and incorrect claims, even if certified by a Chartered Accountant, can still attract penalty under section 271(1)(c) of the Act.

Decision:

The tribunal upheld the levy of penalty u/s 271(1)(c) of the Act, dismissing the appeal of the assessee. The decision was based on the finding that the claim for deduction under section 80IB was false and not bonafide, leading to the conclusion that penalty imposition was justified.

This summary provides a detailed overview of the judgment, highlighting the key issues, arguments presented, and the final decision of the tribunal.