TMI Blog2022 (10) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of Reliance Petroproducts (P.) Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] Since the quantum appeal of the assessee is now pending before the Hon ble High Court, it is appropriate to rely upon the Hon ble Delhi High Court judgment in the case of PCIT, Central-11, vs. Harsh International Pvt. Ltd. [ 2020 (12) TMI 1082 - DELHI HIGH COURT] . The Judicial discipline demand that until and unless the judgment of the Hon ble Jurisdictional High Court is reversed. It has to be respected and followed by the Tribunal functioning under the jurisdiction of that Court. Penalty levied u/s. 271(1)(c) for furnishing inaccurate particulars of income is hereby deleted. - ITA No. 196/Ahd/2019 - - - Dated:- 19-10-2022 - Shri Waseem Ahmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idy from the Government, the receipt is not liable to tax and relied upon the Supreme Court Judgment in the case of Ponni Sugars Chemicals Ltd. and Special Bench Judgment in the case of Reliance Industries Ltd. Thus in a case of controversial/debatable issue penalty u/s. 271(1)(c) cannot be levied and relied upon Hon ble Gujarat High Court Judgment in the case of CIT vs. Madhusudan Industries Ltd. [2014] 47 Taxmann.com 241 wherein the Hon ble High Court held that exclusion of excise duty and sales tax from turnover etc. had been matter of dispute between the Department and the Assessee and thus the issue of deduction is debatable one, on which two opinions are possible, penalty under section 271(1)(c) of the Act cannot be levied in such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by holding that neither explanation 1 to section 271(l)(c) nor the main section itself supported the levy of penalty by the A.O. Whereas, it is abundantly clear that the assessee furnished inaccurate particulars of income, treating revenue expenditure of Rs,2,51,62,142/- as capital in nature. Therefore, furnishing of inaccurate particulars of income is covered within the meaning under main section 271(1)(c) of the I.T. Act. 2. On the facts and in the circumstances of the case and in law, the Ld, C!T(A) has erred in deleting the penalty of Rs.84,69,600/- levied u/s 271(1)(c) of the I. T. Act by holding that neither explanation 1 to section 271(1)(c) nor the main section itself supported the levy of penalty by the A.O. Whereas, the Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant by way of sales tax waiver was in the revenue filed and not in the capital field and therefore, the appellant was not entitled to reduction of such benefit from the total profits of the year? 6.2. Thus the Ld. A.R. pleaded that the issue of subsidy is capital or revenue in nature is a debatable issue pending before the Hon ble High Court of Gujarat, therefore penalty u/s. 271(1)(c) cannot be levied. The Ld. A.R. further submitted that in the previous assessment years 2005-06 2006-07 as against the orders of the Ld. CIT(A), the revenue is not in appeal before the Tribunal, which has become final. Therefore, pleaded to cancel the levy of penalty u/s. 271(1)(c) of the Act for the present Assessment Year 2007-08. 7. Heard rival s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n law for the expenditure on interest would amount to giving inaccurate particulars of such income. Such cannot be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision 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(l)(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 'in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely because the assessee had claimed 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(l)(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(l)(c). That is clearly not the intendment of the Legislature. [Para 10] Therefore, the appeal filed by the revenue had no merits and was to be dismissed. 7.1. Since the quantum appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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