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2023 (5) TMI 826 - AT - Income TaxPenalty u/s 271(1)(c) - Addition u/s 14A r.w.r. 8D - HELD THAT:- We find that the mere fact that the provision of Section 14A r.w. Rule 8D(2)(iii) are held applicable and the claim of the assessee that it has not incurred any expenditure in relation to exempt income not being accepted cannot lead to a situation where the charge of furnishing of inaccurate particulars of income can be fastened on the assessee without leading any positive evidence to the effect that there is wrong furnishing of information vis-a-vis the investments which has yielded or can yield exempt income in future and secondly, there is actual incurrence of certain administrative expenditure for managing these investments during the year under consideration. As we have noted above, there is no finding recorded by the AO either during the assessment proceedings or even during the penalty proceedings to this effect and no positive evidence has been led in this regard and in absence thereof, the penalty cannot be levied on the assessee. The matter is squarely covered by the decision of Reliance Petroproducts Ltd [2010 (3) TMI 80 - SUPREME COURT] wherein an identical matter relating to levy of penalty u/s 271(1)(C) on disallowance u/s 14A was under consideration and it was held that the same cannot lead to satisfaction of charge of furnishing of inaccurate particulars of income and the penalty was held not sustainable in the eyes of law - thus e levy of penalty u/s 271(1)(c) is hereby directed to be deleted. Decided in favour of assessee.
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