TMI Blog2016 (1) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee against the order of CIT (A) dated 19.03.2012 confirming the penalty u/s 271(1) (c) of the act of ₹ 1,54,49,290/-. 02. Brief facts of the case are that assessee is a cooperative bank engaged in the business of banking. For impugned assessment year it furnished its return of income showing Nil Income. In the return of income it claimed deduction u/s 80 P of the Income Tax act of ₹ 3,36,68,582/-. The assessee company was eligible for deduction u/s 80 P up to AY 2006-07 but due to amendment wef 1-4-2007 subsection 4 was introduced u/s 80 P of the act which restricted the deduction only to Primary Agricultural Credit society and Primary cooperative Agricultural and Rural Development bank, therefore apparently assessee was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dance with law. b) There is no bona fide of the assessee in making wrong claim and when confronted to withdraw the same. 05. Before Us the Ld AR has submitted that :- a. Due to amendment in the law assessee mistakenly forgot to apply that law where the deduction u/s 80 P w.e.f. AY 2007-08 was not available to the assessee. Therefore there was a bonafide error on part of the assessee. He submitted that letter dated 20/11/2009 and 15.12.2009 explains the position about the bona fide of the assessee. b. Assessee claimed deduction u/s 80 P (2) of the Act for AY 2007-08 and 2008-09. On coming to know the error that this deduction is not available to the assessee, assessee withdrew the deductions for both the year. Penalty proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished inaccurate particulars of income. This is simply a case of bonafide mistake which has occurred due to change of law applicable in this year. After giving our thoughtful consideration to the facts of this case vis-a-vis the legal position narrated above, we are of the considered opinion that when a wrong claim is made under some bonafide mistake, that cannot be a ground for imposition of penalty u/s 271(1)(c) of the Act. The assessee has been making similar claim and the same were being allowed in earlier assessment years. Due to change in law, this claim was not allowed and the assessee also corrected its mistake by withdrawing the claim, therefore it is not a case of willful wrong claim. More importantly we were invited to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee does not have any say in that. Therefore, this oft repeated argument of revenue deserves to be rejected. Further Honorable Rajasthan High court Jodhpur bench in CIT Udaipur V M/s Chittorgarh Kendriya Sahakari Bank Limited in D.B. Income Tax Appeal No NO.77/2013 where in Honorable high court has dismissed the appeal of the revenue against the order of ITAT deleting penalty where the assessee claimed deduction u/s 80P of the act for AY 2007-08 and withdrew the same on pointed out by AO by filing revised return of income. Honorable High court held that In our view, the submissions of the Revenue fall short of making out a substantial question of law worth consideration. The assessee is a Co-operative Bank and had been entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnishing of inaccurate particulars of income. In fact, when confronted with the legal position, the assessee filed re-revised return, albeit belatedly, withdrawing such claim of deduction. The Appellate Authorities i.e., CIT(A) and ITAT have, in our view, rightly examined the matter with reference to the decision in CIT Vs. Reliance Petro products Pvt. Ltd.: (2010) 322 ITR 158 wherein, the Hon'ble Supreme Court has, inter alia, held as under:- ......A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to inaccurate particulars. The Appellate Authorities have also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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