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2021 (2) TMI 651 - HC - Income TaxPenalty u/s 271(1)(c) - Exemption u/s 11 - AO initiated penalty proceedings and held that the Assessee furnished inaccurate particulars of income by claiming exemption under Section 11 of the Act, in respect of the business which was not incidental to the objects of the Assessee trust, and that the said mistake could not have been said to be a bona fide one - CIT(A) deleted the penalty - ITAT confirmed the order of deletion of penalty - HELD THAT:- It is clear that the penalty proceedings are arising as an outcome of the assessment proceedings, which is still being debated upon. If the issue is debatable, penalty proceedings cannot lie. There is no finding that any details supplied by the Assessee in its return were found to be incorrect, erroneous or false. In fact, as noted in the impugned order dated 26th December, 2017, CIT(A) has categorically observed that no evidence had been brought on record to adduce that furnishing of inaccurate details had been done by the Assessee wilfully, in order to avoid the payments of tax, or to conceal the particulars of income. Dealing with a similar issue, the Supreme Court in Commissioner of Income Tax, Ahmedabad Vs. Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] wherein held 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). - Decided in favour of assessee.
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