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Vibrant De-hydro Foods Pvt. Ltd. Versus Income Tax Officer Ward-9 (3) (3) , Mumbai

2016 (11) TMI 592 - ITAT MUMBAI

Levy of penalty u/s 271(1)(c) - disallowance u/s 80IB - Held that:- "inaccurate particulars" was not defined anywhere in the Act and, therefore, it was held that furnishing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. Reading the words in conjunction, they must mean the details supplied in the Return, which are not accurate, not exact or correct, not according to truth or erroneous. Must hasten to add here that in this case, there is no fi .....

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-DR ORDER The assessee is aggrieved by the impugned order dated 25/09/2014 of the Ld. First Appellate Authority, Mumbai. The only ground raised by the assessee pertains to confirming levy of penalty u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter the Act), amounting to ₹ 12,03,030/- as the claimed disallowance u/s 80IB of the Act was not allowed. 2. During hearing, none was present for the assessee, as registered notices sent for 23/06/2016 and 01/08/2016 were neither responded by t .....

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80IB of the Act amounting to ₹ 38, 93,297/-. The assessment u/s 143(3) was completed on 01/01/2013 assessing the total income at ₹ 39,85,607/- against the nil returned income and book profit of ₹ 60,14,093/- for MAT purpose. The ld. Assessing Officer levied penalty of ₹ 12,03,030/- u/s 271(1)(c) of the Act. On appeal before the Ld. Commissioner of Income Tax (Appeal), the penalty order was affirmed. The assessee is in appeal before this Tribunal. 2.2. If the observation m .....

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e. This proposition is sheltered by the decision from Hon'ble Apex Court in the case of Reliance Petro Products Pvt. Ltd. 322 ITR 158 (SC) and CIT vs Ajaib Singh & Company 253 ITR 630( P &H). While coming to this conclusion, the Hon'ble Apex Court in Reliance Petro Products Pvt. Ltd. (supra) observed 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 cla .....

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ticulars of such income." 2.5. A glance at this provision would suggest that in order to be covered, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. Present is not the case of concealment of the income. That is not the case of the Revenue either. As per Law Lexicon, the meaning of the word "particular" is a detail or details (in plural sense); the details of a claim, or t .....

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ds are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. In Commissioner of Income Tax, Delhi Vs. Atul Mohan Bindal [2009(9) SCC 589], where Hon'ble Apex Court was considering the same provision, the Court observed that the Assessing Officer has to be satisfied that .....

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it is obvious that it must be shown that the conditions under Section 271(1)(c) must exist before the penalty is imposed. There can be no dispute that everything would depend upon the Return filed 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. In Dilip N. Shroff Vs. Joint Commissioner of Income Tax, Mumbai & Anr. [2007(6) SCC 329], Hon'ble Court explained the ter .....

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not be less than the amount of tax sought to be evaded by reason of such concealment of particulars of income, but it may not exceed three times thereof. It was pointed out that the term "inaccurate particulars" was not defined anywhere in the Act and, therefore, it was held that furnishing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. It was further held that the assessee must be found to have failed to prove that his explanation .....

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Anr. was upset. In Union of India Vs. Dharamendra Textile Processors (cited supra), after quoting from Section 271 extensively and also considering Section 271(1)(c), the Court came to the conclusion that since Section 271(1)(c) indicated the element of strict liability on the assessee for the concealment or for giving inaccurate particulars while filing Return, there was no necessity of mens rea. The Court went on to hold that the objective behind enactment of Section 271(1)(c) read with Expla .....

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e Processors (cited supra), was that according to the Court the effect and difference between Section 271(1)(c) and Section 276-C of the Act was lost sight of in case of Dilip N. Shroff Vs. Joint Commissioner of Income Tax, Mumbai & Anr. (cited supra). However, it must be pointed out that in Union of India Vs. Dharamendra Textile Processors (cited supra), no fault was found with the reasoning in the decision in Dilip N. Shroff Vs. Joint Commissioner of Income Tax, Mumbai & Anr. (cited su .....

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