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2017 (3) TMI 390

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..... 2017: 2. These appeals are preferred by the Revenue as against the common order of the Income Tax Appellate Tribunal (in short 'the Tribunal'), dated 19.06.2015. 3. By virtue of the impugned judgment, a common order was passed qua Assessment Years (A.Y.s) 2008-09, 2009-10 and 2010-11. 4. The common issue, which arose before the Tribunal for consideration was, whether penalty under Section 271(1)(c) of the Income Tax Act, 1961, (in short ' the Act') should be confirmed qua the Assessee. 5. The brief facts, which are required to be noticed are as follows: 5.1. In the concerned A.Ys, the Assessee had claimed deduction towards expenditure incurred on travelling etc. under Section 57 of the Act. Returns were, admittedly, filed in respect of the aforementioned A.Ys. The Revenue reopened the assessments qua A.Ys.2008-09 and 2010-11. In so far as A.Y.2009-10 was concerned, it was picked up for scrutiny and a regular assessment order was passed. 5.2. In sum, the result of these proceedings was that the assessee, offered for tax, the sum expended on travel by having it included in the taxable income. Accordingly, both tax and interest were paid by the Assess .....

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..... and also perused the material available on record. Admittedly, the assessee claims travelling and other expenses for earning income from other sources. During the course of assessment proceedings, the assessee claims that the Accountant engaged by her was not immediately available and the vouchers and other documents were not available for production before the Assessing Officer. Now the question arises for consideration is when the assessee claims a deduction while computing total income towards expenditure and the Assessing Officer disallowed the same for want of evidence, whether the same could be construed as furnishing of inaccurate particulars. The Hon'ble Apex Court in the case of CIT vs Reliance Petroproducts Pvt. Ltd. 322 ITR 158, had an occasion to consider an identical issue. When the assessee by furnishing all details claims a deduction which was otherwise allowable could not produce the material during the course of assessment, does not mean that inaccurate particulars were furnished in the return of income. The claim of the assessee towards expenditure was not substantiated due to temporary absence of the Accountant. Therefore, this Tribunal is of the considered o .....

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..... f the Supreme Court rendered in CIT V. Reliance Petroproducts Pvt. Ltd., [2010] 322 ITR 158. 11. Mr.J.Narayanasamy, who appears for the Revenue, says that, a more apposite decision would be the judgment of the Supreme Court in: MAK Data (P) Ltd. V. Commissioner of Income-tax-II [2013] 38 taxmann.com 448 (SC). 12. We have examined closely the judgment of the Supreme Court rendered in MAK Data (P) Ltd. V. Commissioner of Income-tax-II [2013] 38 taxmann.com 448 (SC). 12.1. That was a case, where survey was conducted under Section 133A of the Act, which led to revelation of certain documents. The Assessee, upon being confronted with these circumstances, offered to pay tax on money received in the form of share application money by having it treated as income from other sources. 12.2. It is, in this context, the Supreme Court observed that it was not a case of voluntary disclosure and, therefore, penalty under Section 271(1)(c) of the Act was rightly levied. This aspect of the matter comes through, upon a close perusal of the following observation made in paragraph 9 of the judgment: .....9. We are of the view that the surrender of income in this case is not voluntary .....

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..... ncome 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. However, the Learned Counsel for Revenue suggested that by making incorrect claim for the expenditure on interest, the assessee has furnished inaccurate particulars of the income. As per Law Lexicon, the meaning of the word particular is a detail or details (in plural sense); the details of a claim, or the separate items of an account. Therefore, the word particulars used in the Section 271(1)(c) would embrace the meaning of the details of the claim made. It is an admitted position in the present case that no information given in the Return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The Learned Counsel argued that submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income . We do not think that such can be the interp .....

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..... tried to be argued that the falsehood in accounts can take either of the two forms; (i) an item of receipt may be suppressed fraudulently; (ii) an item of expenditure may be falsely (or in an exaggerated amount) claimed, and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one's income as well as furnishing of inaccurate particulars of income. We do not agree, as the assessee had furnished all the details of its expenditure as well as income in its Return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the Return or not. Merely because the assessee had claimed the expenditure, 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). If we accept the contention of the Revenue then in case of every Return where the claim made is not accepted by Assessing Officer for any reason, the assessee will invite penalty under Section 271(1)(c). That is clearly not the intendment of the Legislature. .....

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