TMI Blog2023 (3) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... of income with dishonest intent. 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 . 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 bonafide 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. We set aside the finding of the learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on u/s. 80P(2)(a)(i) of the Act. 3. Aggrieved against the addition, the assessee filed an appeal before Ld. CIT(A) who dismissed the assessee appeal following Hon ble Gujarat High Court judgment in the case of State Bank of India Co.Op. Society vs. CIT (2016) 72 taxmann.com 64. It is thereafter the Assessing Officer initiated penalty proceedings why penalty u/s. 271(1)(c) should not be levied, since the assessee has furnished inaccurate particulars of income . After considering the reply filed by the assessee, the Assessing Officer levied a penalty of Rs.5,04,622/- u/s. 271(1)(c) of the Act. 4. Aggrieved against the Penalty order, the assessee filed an appeal before Ld. CIT(A) who partly allowed the appeal observing as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. NFAC has grievously erred in law and on facts in upholding the penalty of Rs.5,04,622/- imposed u/s.271(1)(c) by AO in respect of disallowance of deduction of Rs.16,43,080/-u/s.80P(2)(a)(i). 2.2 That in the facts and circumstances of the case as well as in law, the Ld.NFAC ought not to have upheld the penalty of Rs.5,04,622/-imposed u/s.271(1)(c) by AO in respect of disallowance of deduction of Rs. 16,43,080/-u/s.80P(2)(a)(i). It is, therefore, prayed that the penalty of Rs.5,04,622/- upheld by the NFAC may kindly be deleted. 5.1. The Ld. Counsel Mr. S.N. Divatia appearing for the assessee submitted before us though in the quantum appeal it was held by the Co-ordinate Bench of the Tribunal that the assessee is not enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith respect to the interest income from the nationalized bank by claiming the deduction under section 80P(2)(a)(i) of the Act. The word inaccurate particulars has not been defined under the provisions of the Act. Thus we refer the dictionary meaning of inaccurate which denotes not accurate , something incorrect or wrong, not exact, in error. Admittedly, the claim of the assessee for the deduction under section 80P(2)(a)(i) of the Act with respect to interest income from the nationalized bank was not accepted by the ITAT in the quantum proceedings. Thus, it can be concluded that the claim of the assessee was inaccurate. Accordingly, it appears that the penalty provisions under section 271(1)(c) have to be invoked. 7.1. Thus, if we ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered view, there is an explanation 1 to section 271(1)(c) of the Act, which provides deemed concealment of income . Under the Explanation 1 to section 271(1)(c) of the Act, there are two situations. In situation (A), if the assessee fails to offer an explanation or offers an explanation which is found to be false with respect to any fact material to the computation of income, then the amount added or disallowed shall be deemed as concealment of income . In situation (B), if the assessee fails to substantiate the explanation offered by him and fails to prove that such explanation is bona fides and that all the facts relating to such explanation and materials to the computation of income have been disclosed by him, then the amount added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 7.5. 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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