TMI Blog2014 (7) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... ition but was not sufficient to levy the penalty u/s 271(1)(c) of the Act. Relying upon CIT Vs Reliance Petro Products Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] - there was a difference of opinion as regards to the working of disallowance u/s 14A of the Act - The assessee disallowed suo-moto a sum of ₹ 16,020/- while the AO worked out the disallowance at ₹ 41,10,546/- which was more the total claim of the expenses at ₹ 32,06,595 - merely on this basis that the claim of the assessee was not accepted by the AO it cannot be said that the assessee either concealed the income or furnished inaccurate particulars of income - CIT(A) was fully justified in deleting the penalty levied by the AO u/s 271(1)(c) of the Act – thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce u/s 14A but the A.O did not find merit in the submissions of the assessee had calculated the disallowance u/s 14A of the Act at ₹ 41,26,566/-. Hence, the addition of ₹ 41,10,546/- (Rs. 41,26,566/- - ₹ 16,020/-) was made on account of expenses incurred in relation to exempt income u/s 14A of the Act. The A.O also initiated penalty proceedings u/s 271(1)(c) of the Act and levied the penalty of ₹ 13,97,175/-. The A.O referred to the decision of Hon ble Supreme Court in the case of Union of India and Others Vs Dharamendra Textile Processors (2008) 306 ITR 277. 4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and the submissions made before him had been incorporated in para 3 of the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... positive evidence from the A.O that assessee has concealed the income or furnished inaccurate particulars of income, did not ipso facto warrant penalty u/s 271(1)(c) of the Act. The ld. CIT(A) observed that the assessee earned dividend income of ₹ 81,09,932/- and debited total expenditure in the profit and loss account to the tune of ₹ 32,06,595/- which included the expenditure incurred on statutory expenses viz. Auditors fees, legal expenses etc. but a disallowance of ₹ 41,10,546/- had been made against the total expenditure of ₹ 32,06,595/-. He also observed that the assessee on its own disallowed a sum of ₹ 16,020/- u/s 14A of the Act, thus, there was a difference of opinion. The ld. CIT(A) observed that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income or concealed the income. Therefore, only on this basis that the claim of the assessee was not accepted by the A.O, penalty u/s 271(1)(c) of the Act cannot be levied. Reliance was placed on the judgment of the Hon ble Supreme Court in the case of CIT Vs Reliance Petro Products Pvt. Ltd. (2010) 322 ITR 158. 9. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case it is an admitted fact that the assessee earned dividend income of ₹ 81,09,932/- which was claimed as exempt. The assessee on its own disallowed a sum of ₹ 16,020/- u/s 14A of the Act. However, the A.O was not satisfied with the quantum of disallowance made by the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. Where there is no finding that any details supplied by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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