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TMI Blog2018 (6) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... as the 'Act'). 1.1 The grounds raised by the assessee are as under:- "Ld. CIT (A) has erred in deciding Appeal Ex Parte without affording an opportunity to Appellant whereas prior to change of Ld. CIT (A) earlier Ld. CIT (A) has heard the matter and detailed written submissions were filed on both the issues on a/c of i. Disallowance of Interest for Delayed Payments of TDS Rs. 2,81,311/- ii. Disallowance of Donation of Rs. 2,50,000/- And prayed Returned Loss may please be reduced. 1. Ld. CIT(A) erred in facts and in law confirming Penalty u/s 271(1)(c) at 1,51,579/- on account of i. Disallowance of Interest for Delayed Payments of TDS of Rs. 2,81,311/- ii. Disallowance of Donation of Rs. 2,50,000/- Ld. CIT (A) completely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the imposition of the impugned penalty, notice was issued to the assessee for appearance but the notice was returned un-served by the postal authorities, and therefore, the Ld. CIT (A) proceeded to adjudicate the issue on the basis of written submissions filed on behalf of the assessee. The Ld. CIT(A) has held that both the claims of the assessee i.e. regarding claim of interest on delayed payment of TDS and claim of donation, both of which were debited to the Profit & Loss Account were prima facie not allowable. As per the impugned order, it was the assessee's explanation in the written submissions before the Ld. CIT (A) that this payment had been claimed as expenditure by mistake and the same was surrendered during the course of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in the case of CIT v. Reliance Petroproducts (P.) Ltd. reported in [2010] 322 ITR 158/189 Taxman 322, wherein the Hon'ble Court, while interpreting the provisions of section 271(1)(c) of the Act, has held that a glance at the said provision would suggest that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate of his income. In the facts of that case, the court found that it was not a case of concealment of the particulars of the income, nor was it the case of the revenue either. However, the counsel for the revenue suggested that by making an incorrect claim for the expenditure on interest, the assessee had furnished inaccu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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. Therefore, it is obvious that it must be shown that the conditions under section 271(1)(c) must exist before the penalty is imposed. 5.3 Reverting to the facts of the present case, the Assessing Officer, in the penalty order, has observed that the assesseee has furnished inaccurate particulars as well as concealed the income. The AO has held that the act of claiming expenditure which was not allowable under the provisions of the Act was an act of furnishing of inaccurate particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually 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 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 inaccurate particulars." 5.4 Although, both the lower authorities have held that the assessee has furnished inaccurat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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