TMI Blog2015 (7) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee filed return of income on the basis of MAT disclosed in earlier years return of income. Therefore it is held that penalty imposed under section 271(1)(c) qua revised MAT Credit be hereby deleted. Disallowance of expenses incurred on earning exempt income - Held that:- The assessee has disclosed both the figures of expenses as well as income in its P&L account filed along with return of income and produced before us. There is no question of concealing or furnishing inaccurate particulars of income. The AO on part of deduction u/s 80IC on same facts has already dropped the penalty proceedings. The case of the assessee is squarely covered by the decision of the Apex Court in Reliance Petroproducts (P.) Ltd.'s case [2010 (3) TMI 80 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has deliberately furnished inaccurate particulars, hence levy of penalty of ₹ 19,224/- is liable to be quashed. 3. We have heard Ld. Representative of both parties and perused material on record. 4. After hearing both the parties we find that the assessee filed its return of income on 26/09/2010 declaring income of ₹ 1,51,13,970/- after claiming deduction under section 80-IC amounting to ₹ 57,50,045/-. Assessment under section 143(3) was framed on the assessee on 01/02/2013 and the income was assessed at ₹ 1,56,06,655/- , after disallowing expenses amounting to ₹ 56,556/- being expenses relating to exempt income and ₹ 4,36,128/- being deduction claimed under section 80-IC, since it was in the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held that if tax sought to be evaded arose because of lower rate of tax paid and not because of any addition to income then also penalty u/s 271(1)(c) is leviable ,the A.O held that it was a fit case for levy of penalty under section 271(1)(c) and imposed the penalty @ 100% of tax sought to be evaded i.e. ₹ 11,32,386/-, being wrong claim of MAT credit. 6. On the issue of disallowance of expenses under section 14A , the AO rejected the assessee's argument that such disallowance did not attract penalty under section 271(1)(c).The A.O. held that the disallowance under section 14 A is a statutory disallowance and ought to have been inculcated by the assessee company while computing its income for the relevant assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had furnished inaccurate particulars of income, thereby justifying the levy of penalty u/s 271(1)(c) of the Income Tax Act ,1961. 9. We have heard the rival submissions and have gone through the paper book placed before us. We find that the brief issue before us is the levy of penalty under section 271(1)(c) on two counts 1. excess claim of brought forward MAT credit and 2.disallowance of expenses incurred on earning exempt income. 9.1. On the issue of brought forward MAT Credit, the undisputed facts before us are that the assessee filed its return of income on 26/09/2010 and claimed brought forward MAT credit of ₹ 90,25,449/- the details of which , disclosed in the computation of income for AY 2010-11 and produced at paper b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplated under section 271(1)(c), is the income on which taxes are to be computed and paid. This is evident from section 271(1)(c) itself which quantifies the amount of penalty, to the tax sought to be evaded by concealing / furnishing inaccurate particulars of income. Taxes paid or payable are thus not income for the purposes of Section 271(1)(c). Particulars of MAT credit furnished in the return of income cannot therefore be said to be particulars of Income for the purpose of levying penalty u/s 271(1)(c). 9.4. Moreover the act of furnishing inaccurate particulars of income / concealing particulars of income is to be seen in relation to the point of time when the return is filed. From the facts before us ,as on the date of filing retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revised MAT Credit be hereby deleted . 10. As to the penalty levied on disallowance of ₹ 56,556/- being expenses incurred on earning exempt income , the assessee has disclosed both the figures of expenses as well as income in its P L account filed along with return of income and produced before us at paper book 21 22 of paper book II. There is no question of concealing or furnishing inaccurate particulars of income. The AO on part of deduction u/s 80IC on same facts has already dropped the penalty proceedings. The case of the assessee is squarely covered by the decision of the Apex Court in Reliance Petroproducts (P.) Ltd.'s case (supra). The penalty imposed of ₹ 19,224/- is therefore hereby deleted. 11. In result t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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