TMI Blog2019 (1) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... HIGH COURT] has reexamined the decision of Reliance Petroproducts Pvt.Ltd. [2010 (3) TMI 80 - SUPREME COURT] and held that unless the details supplied in the return of income are not accurate, not exact or correct, not according to truth or erroneous, it cannot be said to be inaccurate particulars. In the case under appeal before us, admittedly, the particulars of expenditure incurred by the assessee have been accepted to be true and accurate by the Assessing Officer himself because he has not doubted the genuineness of the expenditure incurred. He only disputed whether the expenditure was incurred for normal business of manufacturing or for research work. This claim is also accepted by the learned CIT(A) that the expenditure was incurred for research purposes. The disallowance was made only because the deduction was allowed at a lesser rate than what was claimed by the assessee no inaccurate particulars deemed to be given - Decided in favour of assessee. - ITA No.4173/Del/2014 - - - Dated:- 9-1-2019 - Shri G.D. Agrawal, Vice President And Shri Sudhanshu Srivastava, Judicial Member For the Appellant : Shri Gautam Jain, Advocate and Shri Lalit Mohan, CA. For the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccurate particulars by claiming weighted deduction under Section 35(2AB) amounting to ₹ 61,68,157/- (Rs.38,22,107/- plus ₹ 23,46,050/-), which as per law is not allowable to him as the assessee does not satisfied the conditions to be fulfilled under Section 35(2AB). In view of above, it is clear that the assessee has claimed wrong deduction to the extent of ₹ 61,68,157/- thereby concealing of its income as well as furnishing of inaccurate particulars of his income with a view to evade taxes. A penalty of ₹ 22,57,083/- is therefore imposed under Section 271(1)(c) of the IT Act as per following calculation : 4. At the time of hearing before us, it is stated by the learned counsel that the assessee derives income from manufacturing of door trims, roof head liner for automobiles and body parts for scooters etc. That during the year under consideration, the assessee has incurred certain capital as well as revenue expenditure on research and development for developing its products and claimed deduction u/s 35(2AB) which is permissible at the rate of 150% of the actual expenditure incurred. The Assessing Officer treated the expenditure to be genuine bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. 7. That Hon'ble Jurisdictional High Court has considered this decision and some other decisions in the case of Samtel India Ltd. (supra) and their Lordships held as under :- 11. A glance at the Section 271(1)(c) presents two essentials - concealment and furnishing inaccurate particulars of income . The current appeal is, however, only concerned with the interpretation of the phrase furnishing inaccurate particulars of income. The Revenue claims that by furnishing a wrong claim the assessee has furnished inaccurate particulars of income. The meaning of the phrase furnishing inaccurate particulars of income was explained by the Supreme Court in the case of Commissioner of Income Tax vs Reliance Petroproducts Pvt Ltd [(2010)322ITR158] by bifurcating particulars and inaccurate where particular was explained to include the details of a claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had claimed the expenditure, which claim was not accepted or was not acceptable to the revenue, that, by itself, would not attract the penalty under section 271(1)(c). If the contention of the revenue was accepted, then in case of every return where the claim made was not accepted by the Assessing Officer for any reason, the assessee would invite penalty under section 271(1)(c). 13. The intention of the Parliament cannot be taken to have been to penalize everyone who makes a wrong claim for deduction. The legislature does not intend to penalize every person whose claim is disallowed. This is not the aim of the legislature. The Tribunal in the facts of this case, therefore, correctly reached this conclusion. The question of law is answered in favour of the assessee and against the Revenue; therefore, the appeal has no merit and is dismissed. 8. Learned Senior DR has relied upon the decision of Hon'ble Jurisdictional High Court in the case of Morgan Finvest (P.) Ltd. (supra), wherein their Lordships sustained the levy of penalty u/s 271(1)(c) holding the claim of depreciation not bona fide with the following finding :- Even if it is assumed that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of the interest claimed as a deduction under section 36(1)(iii) of the Act was deleted by the Commissioner of Income-tax (Appeals) though it was later restored, by the Tribunal, to the Assessing Officer. The appeal filed by the assessee against the order of the Tribunal was admitted by the High Court. It was, in these circumstances, that the Tribunal came to the conclusion that the assessee had neither concealed the income nor filed inaccurate particulars thereof. In recording this finding, the Tribunal felt that if two views of the claim of the assessee were possible, the explanation offered by it could not be said to be false. This, however, is not the factual position in the case before us. The facts of the present case thus are clearly distinguishable. It is true that mere submitting a claim which is incorrect in law would not amount to giving inaccurate particulars of the income of the assessee, but it cannot be disputed that the claim made by the assessee needs to be bona fide. If the claim besides being incorrect in law is mala fide, Explanation 1 to section 271(1)(c) would come into play and work to the disadvantage of the assessee. 11. Thus, their Lordships ..... X X X X Extracts X X X X X X X X Extracts X X X X
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