TMI Blog2017 (5) TMI 1570X X X X Extracts X X X X X X X X Extracts X X X X ..... Per Sandeep Gosain, Judicial Member: This present appeal has been filed by the revenue against the order of Commissioner of Income Tax (Appeals)- 7, Mumbai, dated 24.03.2015for A.Y. 2010-11. The grounds of appeal are mentioned herein below:- 1. Whether on the facts of the case and in law the ld.CIT(A) erred in deleting penalty u/s.271(1)(c) of the I. TAct 1961 of ₹ 98,66,6261- on the ground that there is no concealment of any fact. 2. 'Whether. On the facts and in the circumstances of the case and in law the Id. C'IT(4) erred in not accepting that it is a concealment., when it was proved that assessee is not in charitable activity but in commercial/ business activity and same was upheld in appeal 3. Whether on the facts of the case and in law the id. CIT(A) erred in not accepting that assessee is deliberately claiming exemption u/s.]], even though the judicial authorities has decided that assessee is not doing a charitable activity 4. The Appellant prays that, to the extent of above grounds, the order of the Commissioner of Income Tax (Appeal)-7, Mumbai be set aside and that of the Assessing Officer be restored. 5. The Appellant craves leave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of this, we are inclined to restore the matter back to the file of the assessing officer with a direction to record a finding as to whether the income from the newspaper has been utilised for the objects of the trust during the relevant assessment years and if so to follow the decision of Hon'ble Supreme Court (cited supra) if the income is so utilised and otherwise to decide according to law. Thus, these appeals of the assessee are allowed for statistical purpose only . 7.2 In the case of the assessee for the A.Y. 1996-97, 1998-99 and 2003-04 (ITA No. 291, 292 293/Mum/2007), the issue before the Tribunal was whether the surplus funds utilised for acquisition of assets for business purposes would amount to application of income or not for charitable purpose. The Tribunal held that the expenditure in respect of those fixed assets in respect of which depreciation has been claimed and allowed to the assessee cannot be treated as application of income. However, the balance amount spent for acquisition of fixed assets, on which no depreciation has been allowed, is to be treated as application of income as per the test laid down by the Tribunal in assessee s own case for A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (Appeals) erred in not appreciating that while considering application of income, deficits of the earlier years had to be considered and a holistic view had to be taken. 7.5 The Tribunal concluded that the assessee s case was wholly unmaintainable and dismissed the appeal. 7.6 Let us now go back to the background on which the AO has imposed penalty u/s 271(1)(1) of the Act. In the assessment order for the A.Y. 2007-08, the AO has made the following additions: 1. Non-payment of employees employers Contribution of Provident fund ₹ 22,57,426/- 2. Non-payment/late payment of ESIC contribution ₹ 3,21,183/- 3. Penalty for contravention of law ₹ 5,910/- 4. Non-deduction of TDS on payments attracting Provisions of section 40(a)(ia) ₹ 21,30,302/- 5. Prior Period Expenses disallowed u/s 43B ₹ 23,92,292/- 6. Disallowance u/s 40A(2b) ₹ 2,97,527/- Total ₹ 74,04,640/- 7.7 However, the learned CIT(A), considering the facts of the case, allowed certain expenses to the assessee and confirmed the following additions: 1. Non-payment of employees employers Contribution of Provident fund (Rs. 22,57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee could not be held guilty of furnishing inaccurate particulars. The revenue argued that submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income. Such cannot be the interpretation of the concerned words. The words 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 of inaccurate particulars. [Para 7] Therefore, it must be shown that the conditions under section 271(1)(c ) 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. [Para 8] The word 'particulars' must mean the details supplied in the return, which are not accurate, not exact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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