TMI Blog2022 (2) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... t the most, the act of the assessee may be termed as filing of incorrect claim which does not attract the penal provisions contained under Section 271(1)(c) of the Act. It is settled principle of law that when quantum appeal is admitted by the Hon'ble High Court by framing a question of law, as in the instant case, penalty u/s 271(1)(c) of the Act is not leviable as has been held by Hon'ble Delhi High Court in cases of PCIT vs. Harsh International (P) Ltd.[ 2020 (12) TMI 1082 - DELHI HIGH COURT] and CIT vs. Nayan Builders Developers [ 2014 (7) TMI 1150 - BOMBAY HIGH COURT] The assessee is that when substantial question of law has been framed by the Hon'ble High Court in an appeal preferred by the assessee challenging quantum order, the issue has become debatable, the impugned penalty could not survive. We are of the view that Assessing Officer has failed to bring on record if assessee has furnished inaccurate particulars income at any stage of assessment proceedings, hence, the question framed in preceding para is decided in favour of the assessee. So finding no illegality or perversity in the impugned order passed by the Commissioner of Income-tax(Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee against the order passed by the Tribunal as lying admitted in the Hon'ble High Court. 6. In the backdrop of the aforesaid undisputed facts, the sole question arises for determination is: as to whether assessee company has furnished inaccurate particulars of income or has concealed particulars of its income during the course of assessment proceedings so as to attract penal provisions contained under Section 271(1)(c) of the Act. 7. Learned Departmental Representative for the Revenue challenging the impugned order passed by the learned Commissioner of Income-tax(Appeals) relied upon the order passed by Assessing Officer and contended that since the assessee company has lodged inadmissible claim, it amounts to furnishing of inaccurate particulars sufficient to levy the penalty under Section 271(1)(c) of the Act. 8. However, on the other hand, learned AR for the assessee to repel the arguments addressed by learned Departmental Representative contended inter alia that during the course of assessment proceedings, assessee company has not furnished any inaccurate particulars during assessment proceedings rather made a bona fide claim on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpose the assessee to the penalty unle3ss the case is strictly covered by the provision, the penalty proceedings cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing of inaccurate particulars. [Para 7] Therefore, it must be shown that the conditions under section 271(1)(c) exist before the penalty is imposed. 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. [Para 8] The word particulars must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. In the instant case, there was 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 would be no question of inviting the penalty under section 271(1)(c). A mere making of the claim, which is not sustainable in law by itself will not amount to furnishing of inaccurate particulars regarding the income of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted by the Hon'ble High Court by framing a question of law, as in the instant case, penalty under Section 271(1)(c) of the Act is not leviable as has been held by Hon'ble Delhi High Court in cases of PCIT vs. Harsh International (P) Ltd.: 431 ITR 118 (Del.) and CIT vs. Nayan Builders Developers: 368 ITR 665 (Del.) 12. Ratio of the aforesaid decisions relied upon by learned AR for the assessee is that when substantial question of law has been framed by the Hon'ble High Court in an appeal preferred by the assessee challenging quantum order, the issue has become debatable, the impugned penalty could not survive. 13. We have perused the order passed by the Hon'ble High Court in case of quantum of appeal filed by the assessee challenging the order passed by the Tribunal in which substantial question of law has been framed vide order dated 24.9.2015 in ITA No. 22/2015 as under: (a) Whether on the facts and in the circumstances of the case, the Tribunal erred in law in holding that expenditure incurred on account of non-compete fee paid to sellers of bottling business was not allowable revenue deduction; instead in treating the same as in the nature of capita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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