9911796707
TMI Blog2021 (2) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Commissioner of Income Tax (Appeals) has erred in confirming the penalty u/s 271(1)(c) levied by the Assessing Officer. Appellant prays to delete the same. 2. Penalty Order is bad in law, same may please be cancelled. 3. Appellant prays for just and equitable relief." 3. The brief facts of the case are as under : The appellant is a partnership firm and engaged in the business of Builders and Promoters. The assessee filed his e-return of income for the assessment year 2007-08, on 20.09.2007 disclosing nil income after claiming deduction u/s 80IB(10) of the Income Tax Act. 4. Against the said return of income, the assessment was completed u/s 143(3) of the Act vide order dated 20.11.2009 denying the claim of deduction u/s 80IB(10) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. Subsequently, another show cause notice was issued on 11.08.2011. But however, assessee had not filed any explanation to show cause notices and therefore, the AO had proceeded with the matter by holding the appellant was guilty of furnishing of inaccurate particulars by placing reliance on the decision of Hon'ble Delhi High Court in the case CIT Vs. Escorts Finance Limited reported in (2008) 292 ITR 658 levied penalty of Rs. 1,63,43,480/- vide order dated 21.12.2012. 5. Being aggrieved by the levy of penalty, the appellant had preferred appeal before Commissioner of Income Tax (Appeals) contending that mere disallowance of claim for deduction does not tantamount to furnishing of inaccurate particulars of income placing reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at on identical facts in the case of Dalmia Dyechem Industries Ltd., reported in 377 ITR 133, Hon'ble Bombay High Court framed a question of law : "in a case involving the initiation of penalty on this fact demonstrates the debatable nature of the issue in the quantum appeal and therefore, no penalty can be levied". He further submitted that when the quantum appeal is pending for disposal before the Tribunal or Commissioner of Income Tax (Appeals), the order imposing penalty is pre-mature in terms of Sec.275(1)(a) of the Act placing reliance on the decision of Hon'ble Bombay High Court in the case of R B Sreeram Durga Prasad Vs. CIT, Nagpur reported in (2016) 65 Taxmnn.com 293. 8. On the other hand, the learned Departmental Representative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings u/s 273 r.w.s 271(1)(c) of the Act were initiated by the AO on the allegation that the appellant had furnished inaccurate particulars of income. From the perusal of the assessment order as well as the penalty order passed u/s 271(1)(c) of the Act, there is no finding by the AO as to how and in what manner, the assessee had furnished the inaccurate particulars of income leading to addition, to the returned income of the assessee except making a bald charge against the assessee that assessee has furnished inaccurate particulars of income. In the absence of this finding by the AO, the order of penalty cannot be sustained in the eyes of law and reliance can be placed on the following decisions : i) CIT Vs. Balbir Singh (2008) 304 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 s. 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. 10. It was tried to be suggested that s. 14A of the Act specifically excluded the deductions in respect of the expenditure incurred by the assessee in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 271(1)(c). That is clearly not the intendment of the legislature. 11. In this behalf the observations of this Court made in Sree Krishna Electricals vs. State of Tamil Nadu & Anr. (2009) 23 VST 249 (SC) as regards the penalty are apposite. In the aforementioned decision which pertained to the penalty proceedings in Tamil Nadu General Sales-tax Act, the Court had found that the authorities below had found that there were some incorrect statements made in the return. However, the said transactions were reflected in the accounts of the assessee. This Court, therefore, observed : "So far as the question of penalty is concerned the items which were not included in the turnover were found incorporated in the appellant's account books. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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