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2021 (8) TMI 107 - AT - Income TaxPenalty u/s 271(1)(c) - assessee had sold a plot of land in respect of which deduction u/s 54B claimed - withdrawal of deduction u/s 54B - AO in co-owners case disallowed claim u/s 54B as agriculture activities should have been carried out of the land within 2 years immediately prior to the date of transfer of land which was not fulfilled - assessee is the co-owner and therefore he withdrew the claim u/s 54B of the Act when he was confronted regarding the agriculture activities - HELD THAT:- We note that having withdrawn the deduction under section 54B of the Act, the assessee has agreed to pay the taxes alongwith interest and assessee, had in fact, paid the taxes alongwith interest on account of withdrawal of deduction under section 54B - AO has imposed the penalty u/s 271(1)(c) of the Act stating that withdrawal of deduction under section 54B of the Act, is kind of a furnishing of inaccurate particulars of income and concealment of income. We do not agree with the AO, as the assessee had furnished all the details of its deduction u/s 54B in the return of income, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on assessee`s part. It was up to AO to accept assessee`s claim in the Return of Income or not. The assessee was having bona fide belief that he is entitled to claim deduction under section 54B as he was having land at various places. Thus, merely because the assessee had claimed the deduction under section 54B 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) of the Act. As conscious of landmark decision in the case of CIT Vs. Reliance Petroproducts [2010 (3) TMI 80 - SUPREME COURT] holding that just merely claim of wrong deduction in the return of income does not attract penalty under section 271(1)(c) - Decided in favour of assessee.
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