TMI Blog2022 (3) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... Act with respect to the interest income as discussed above. It is also pertinent to note that the assessee has claimed before the learned CIT (A) that it was allowed deduction under section 80P(2)(a)(i) of the Act with respect to the interest income from the nationalized bank with respect to the assessment years up-to 2011-12. Claim of the assessee at the most can be regarded as inaccurate claim which cannot be equated with the furnishing inaccurate particulars of income. It is for the reason that nothing has been brought on record by the authorities below suggesting that the assessee has furnished the particulars of income with dishonest intent. As regards the explanation 1 to section 271(1)(c) of the Act, there was no iota of evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee is that the learned CIT (A) erred in confirming the penalty levied by the AO for ₹ 56,728/- under the provisions of section 271(1)(c) of the Act. 3. The assessee in the present case is a society and engaged in the activity of providing credit facilities to its members. The assessee in the year under consideration has claimed deduction under section 80P(2)(a)(i) of the Act for ₹ 1,93,585/- representing the interest income from the nationalized bank which was disallowed by the AO on the reasoning that the impugned income is not arising from the financing activities with the members in the assessment framed under section 143(3) of the Act vide order dated 23rd October 2015. 3.1 As per the AO, the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lized bank was not eligible for deduction as held by the Hon ble Gujarat High Court. Therefore, the wrong claim made by the assessee tantamount to furnishing inaccurate particulars of income. 4. Aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 4.1 The assessee has filed submission along with the memo of appeal that the deduction claimed under section 80P(2)(a)(i) of the Act cannot be treated as furnishing inaccurate particulars of income. At the most, the claim made by the assessee can be a wrong claim which is not equivalent to furnishing inaccurate particulars of income. 4.2 The assessee also contended that the AO has not made any specific charge while initiating the penalty proceedings under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulars of income in his income tax return which is subsequently verified by the revenue. If in the process of verification of the income of the assessee, the AO calculates different total income than the income declared by the assessee, the difference between incomes declared by assesses and assessed by the AO would amount to furnishing of inaccurate particulars of income or concealment of income. However, we note that the Hon ble Supreme Court in the case of Dilip N Shroff vs. JCIT reproetd in 161 taxman 218 has discussed the term inaccurate by observing that the word inaccurate signifies a deliberate act or omission on the part of the assessee. Thus, to arrive at the conclusion that, the assessee has furnished inaccurate particulars of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ached with it. As regards the main provisions of section 271(1)(c) of the Act, we find that the interest income from the nationalized bank was duly incorporated in the financial statements. But the same was treated as income from other sources by the AO which was subsequently confirmed by the learned CIT (A) and ITAT. If we see gross total income in either of the case remained the same. It was the deduction which has been denied by the AO with respect to the interest income from the nationalized bank after making reliance on the judgment of Hon ble Gujarat High Court in case of State Bank of India which was passed dated 25th April 2016 reported in 72 Taxman.com 64. Likewise, the Tribunal passed the order dated 26th March 2015 reported in 57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lars of income with dishonest intent. 6.4 As regards the explanation 1 to section 271(1)(c) of the Act, there was no iota of evidence suggesting that the explanation offered by the assessee was false. Thus the claim of the assessee cannot be said amounting to concealment of particulars of income. Likewise, there was no finding of the authorities below qua the fact that the assessee fails to substantiate the explanation offered by him and fails to prove that such explanation is bona fides with respect to material facts relating to the computation of total income. Thus in our considered view the provisions of explanation 1 to section 271(1)(c) of the Act cannot be attracted in the given facts and circumstances. In view of the above and aft ..... X X X X Extracts X X X X X X X X Extracts X X X X
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