2022 (5) TMI 522

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..... erning AY 2012-13. 2. As per the grounds of appeal, the assessee has challenged the imposition of penalty of Rs.13,75,050/- on account of disallowance of deduction under Section 54F of the Act. 3. When the matter was called for hearing, ld. counsel for the assessee submitted that penalty imposed by the Assessing Officer under Section 271(1)(c) amounting to Rs.13,75,050/ - and confirmed by the ld. CIT(A) is wholly unjustified in the facts of the present case. It was pointed out that the Assessing Officer in the quantum proceedings, disallowed the claim of the assessee under Section 54F of the Act for exemption of capital gains on the ground that the assessee has not satisfied the conditions of Section 54F of the Act. In this regard, the ld .....

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..... rnished inaccurate particulars of such income per se. It was contended that mere incorrect claim in law for such deduction would not automatically tantamount to the default specified under Section 271(1)(c) of the Act as held by the Hon'ble Supreme Court in CIT vs. Reliance Petro Products Pvt. Ltd., (2010) 322 ITR 158 (SC). The ld. counsel accordingly urged for cancellation of the penalty imposed by the Assessing Officer. 4. Ld. DR for the Revenue relied upon the actions of the Ld. CIT(A) and Assessing Officer as reflected in their respective orders. 5. We have carefully considered the rivals submissions. The short issue, in the instant case, is towards justification of imposition of penalty with aid of Section 271(1)(c) for rejection of .....

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..... reported in 189 Taxman 322. Admittedly, no inaccuracy was found in the particulars of deduction claimed as such. The assessee also has a basis for claim of deduction in the light of the fact that security deposit was accepted from the brokers against the sale of property which ultimately materialized 20-25 days later resulting in slight delay in actual execution of sale agreement of old asset. In such circumstances, small breach in the stipulated period of one year between purchase and sale of assets would not justify imposition of onerous penalty. 5.3 The order of the CIT(A) is accordingly set aside and the penalty imposed by the Assessing Officer on this score stands cancelled. 6. In the result, the appeal of the assessee is allowed. .....

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