TMI Blog2021 (8) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... 18/Bang/2017 - - - Dated:- 11-8-2021 - Shri N.V. Vasudevan, Vice President And Shri Chandra Poojari, Accountant Member For the Appellant : Shri K.R. Vasudevan, Advocate For the Respondent : Ms. Neera Malhotra, CIT(DR)(ITAT), Bengaluru ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER This appeal by the assessee is directed against the order of CIT(Appeals)-15, Delhi dated 13.3.2017 for the assessment year 2009-10. 2. The assessee has raised the following grounds of appeal :- 1. On the facts and circumstances of the case and in law, the Deputy Commissioner of Income Tax, Circle 16(1), New Delhi (hereinafter referred to as ₹ Ld. AO') erred in passing the order under section 271(1)(c) of the Income Tax Act, 1961 (₹ Act') (₹ Penalty order') levying penalty of INR 4,37,47,660 and the Commissioner of Income-tax (Appeals)-15 [ Ld.CIT(A)'] erred in upholding the said order. 2. On the facts and circumstances of the case and in law, the Ld. AO and the Ld. CIT(A) erred in not appreciating the fact that penalty proceedings are separate and distinct from the assessment proceedings, and any additions/ disallowances made in the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act, 1961 [the Act], the ld. AR submitted that penalty in this case was levied on the following issues:- (i) Export proceeds were not realized within the time prescribed u/s. 10A of the Act. As such, penalty levied on the amount of ₹ 12,86,23,096 to the extent of 100% of tax sought to be evaded. (ii) The assessee wrongly claimed the short term capital loss on certain shares which attracted provisions of section 94 and penalty levied on the amount of ₹ 87,048 As such, penalty levied on the amount of ₹ 12,86,23,096 to the extent of 100% of tax sought to be evaded. 6. We have heard both the parties and perused the material on record. The ld. AR submitted that the issue relating to claim of deduction u/s. 10A on the quantum addition was subject matter of appeal before this Tribunal and vide order dated 03.06.2020 the Tribunal in ITA Nos.2815/Del/2013 held as follows:- 3. We have considered the rival submissions. We find that as per the grounds raised by the Revenue as reproduced above, this is the grievance of the Revenue that learned CIT(A) has erred in directing the AO to exclude the expenses incurred in foreign currency outside India fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd income against the short term capital gain as per provisions of Section 94(7) of the Act. However, during the course of the assessment proceedings, the assessee firstly submitted that the said units were not sold or transferred but were redeemed and as such the same were not covered by the provisions of Section 94(7) of the Act. We agree with the authorities below that the said contention of the assessee has no merits as the Tribunal has held in the case of Mrs. Parviz Wang Chuk Basi (supra), that redemption of bonds/units after maturity is a transfer within the meaning of the Section 2(47) of the Act. Not only this, in the appeal filed by the assessee, the Tribunal vide its order dated 27th October, 2010, in ITA No.347/M/2007 also held that the units which have been redeemed would constitute transfer for the purpose of Section 94(7) of the Act. Hence, the said plea of the assessee has rightly been rejected by the authorities below. Now, the question arises as to whether it was a bonafide claim of the assessee or the assessee has deliberately/intentionally furnished inaccurate particulars of income. If the assessee has consciously furnished the inaccurate particulars of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch has also held that if the Assessing Officer has made the addition only on the basis of material and information furnished by the assessee, the levy of penalty under Section271(1)(c) of the Act is not justified. In this regard, we consider it's prudent to reproduce para 16 of the said case, which reads as under :- 16.... On perusal of the orders of revenue authorities, we find that the penalty under section 271(1)(c) was levied on the ground that the assessee violated of provisions of section 94(7) of the Act by not ignoring losses while computing short-term capital gains on transactions related to section 94(7) of the Act. It is important to state here that the Assessing Officer made the addition only on the basis of material and informations furnished by the assessee. The Apex Court in the case of Reliance Petroproducts (P.) Ltd. (supra) regarding the word 'particulars' used in section 271(1)(c) has held that there can be no dispute that everything would depend upon the Return filed because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. But in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reliance Petroproducts Pvt. Ltd., reported in 322 ITR 158, wherein it was held that there can be no dispute that everything would depend upon the return filed because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. But in the case when it was found that the assessee had furnished full detail and had not concealed any particulars of income and when there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under Section 271(1)(c) of the Act. It was also observed that a mere making of a claim, which was not sustainable in law, by itself, would 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. The Tribunal also held that the assessee had demonstrated that its claims were bonafide claims and accordingly the penalty levied was cancelled. Not only this, we also observe that the Hon'ble jurisdictional High Court in ITA No.3899/2010 (CIT Vs. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. The ld. DR relied on the orders of lower authorities. 11. In our opinion, in similar facts and circumstances of the case, the Tribunal deleted the penalty in the case of Administrator of the Estate of late Mr. E.F. Dinshaw cited supra . As such, penalty cannot be levied on this count also. More so, the Hon ble Supreme Court in CIT Ahmedabad v. Reliance Petroproducts Pvt. Ltd., 322 ITR 158 (SC) held as follows:- A glance of provision of section 271(1)(c ) would suggest that in order to be covered, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The instant case was not the case of concealment of the income. That was not the case of the revenue either. It was an admitted position in the instant case that no information given in the return was found to be incorrect or inaccurate. It was not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee could not be held guilty of furnishing inaccurate particulars. The revenue argued that submitting an incorrect claim in law for the expenditure o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imed 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). That is clearly not the intendment of the Legislature. [Para 10] 12. The Tribunal in the case of DCIT v. Mastek Ltd. in ITA No.118/Ahd/2007 vide order dated 16.04.2010 held as under:- 5. We have considered the rival submissions and the material available on record. It is admitted fact that assessee disclosed all the particulars of the above disallowances in the return of income. The AO made part of the disallowances out of the above expenditure which has been substantially reduced by the learned CIT(A). It would, therefore, show that the assessee disclosed all the relevant facts and materials in the return of income as well as before the authorities below on merit. It is not a case of the AO that the assessee has made false claim or suppressed the facts relating to the above claims of the expenditure. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;ble Punjab and Haryana High Court in the cases of CIT Vs Dhillon Rice Mills [2002] 256 ITR 447 (P. H.) and in the case of Harigopal Singh Vs CIT [2002] 258 ITR 85 (PH) held that no penalty for concealment leviable where income assessed is a mater of estimate . Hon'ble Supreme Court in the case of M/s. Rajasthan Spinning Weaving Mills 2009 - PIOL - 63 - SC held that on every demand penalty is not automatic . 8. Considering the facts of the case as noted above in the light of the above decisions and in the light of the findings of the learned CIT(A), it is clear that additions have been sustained partly by disallowing the expenditure on interpretation of the provisions of law and even the disallowance of ₹ 2,00,000/- u/s 14A has been restored to the file of the AO for re-consideration. Therefore, it is not a fit case for levy of penalty. The AO has not brought any material on record to prove that the assessee has furnished inaccurate particulars of income or concealed particulars of income. We accordingly do not find any justification to interfere with the order of the learned CIT(A). We accordingly confirm his findings and dismiss the appeal of the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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