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2019 (9) TMI 440

..... ing the words in conjunction, they must mean the details supplied in the Return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under section 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars - we are satisfied that the necessary condition for initiating and levying penalty u/s 271(1)(c) did not exist Therefore, we are satisfied that the penalty u/s 271(1)(c) is not leviable in the case before us. Since the facts and circumstances in all the other cases before us are being similar, following the above, the penalty u/s 271(1)(c) is deleted in all the cases. - Decided in favour of assessee. - 230/H/19, 231/H/19, 232/H/19 - 5-9-2019 - Smt. P. Madhavi Devi, Judicial Member And Shri S. Rifaur Rahman, Ac .....

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..... holly unsustainable in law and on facts. 2) The Ld. CIT (A) failed to note that the return of income filed in response to the notice u/s 153A of the Act on 12/04/2016 admitting an income of ₹ 4,18,41,710/- which was accepted and therefore, the CIT (A) ought to have held that there was no concealment or furnishing inaccurate particulars whatsoever in the return of income filed u/s 53A of the Act and therefore erred in confirming the levy of penalty u/s 271(1)(c) o f₹ 1,22,00,000/-. (3) The Ld. CIT(A) failed to note that there was no concealment whatsoever in the return of income u/s 153A on 12/04/2016 as section 153A treats a return of income filed u/s 153A as a return of income required to be filed u/s 139 and therefore, the Ld. CIT (A) erred in confirming the penalty u/s 271(1)(c) of the Act at ₹ 1,22,00,000/- . (4) Ld. CIT (A) failed to note that the exemption u/s 10(38) was surrendered on the basis of a discussion with the authorities that no penalty proceedings will be initiated / levied and therefore, the Ld. CIT (A) erred in confirming the levy of penalty u/s 271(1)(c) at ₹ 1,22,00,000/- . (5) The Ld. CIT (A) erred in confirming the levy of penalty u/s .....

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..... ing penalty or reduce it to writing. That is not the controversy in the case on hand. Further, ld. AR relied on the decision of the Bombay High Court in the case of CIT Vs. Lullabhai Hirabhai, [1991] 190 ITR 427 (Bom.) 5.1 Mainly, he relied on the decision of the coordinate bench of this Tribunal in the case of Smt. Amita Tulsyan and others in ITA No. 1513/Hyd/2018 and others vide order dated 10/05/2019 (wherein both the Members are party) 6. The ld. DR, on the other hand, submitted that it is not voluntary disclosure, but, based on the facts that it is a penny-stock transaction and it came to light because of search proceedings. He submitted that the CIT(A) discussed this issue at length in her order and assessee has withdrawn 10(38) deduction in the revised return of income, which clearly indicates that the assessee has violated the provisions of income-tax. He submitted that the case relied upon by the assessee in the case of Pr. CIT Vs. Smt. Baisetty Ravathi (supra) is distinguishable on facts. He relied on the decision in the case of Sundaram Finance Ltd. Vs. ACIT, TC (Appeal) Nos. 876 & 877 of 2008, judgment dated 23/04/2018. Further, he submitted that assessee has violat .....

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..... 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 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. In CIT v. Atul Mohan Bindal [2009] 9 SCC 589, where this Court was considering the same provision, the Court observed that the Assessing Officer has to be satisfied that a person has concealed the particulars of his income or furnished inaccurate particulars of such income. This Court referred to another dec .....

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..... ction 271(1)(c), the Court came to the conclusion that since section 271(1)(c) indicated the element of strict liability on the assessee for the concealment or for giving inaccurate particulars while filing Return, there was no necessity of mens rea. The Court went on to hold that the objective behind enactment of section 271(1)(c) read with Explanations indicated with the said section was for providing remedy for loss of revenue and such a penalty was a civil liability and, therefore, wilful concealment is not an essential ingredient for attracting civil liability as was the case in the matter of prosecution under section 276C of the Act. The basic reason why decision in Dilip N. Shroff's case (supra) was overruled by this Court in Dharamendra Textile Processors' case (supra), was that according to this Court the effect and difference between section 271(1)(c) and section 276C of the Act was lost sight of in case of Dilip N. Shroff (supra). However, it must be pointed out that in Dharamendra Textile Processors' case (supra), no fault was found with the reasoning in the decision in Dilip N. Shroff's case (supra), where the Court explained the meaning of the terms &q .....

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