TMI Blog2023 (6) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... omputational provisions provided in the Rules, the assessee in such facts and circumstances, cannot be charged with having concealed or furnished inaccurate particulars of income vis- -vis the expenses disallowed. Penalty levied on account of the disallowance of expenses being administrative in nature u/s 14A of the Act is we hold not sustainable in law and is directed to be deleted. Levy of penalty - Failure to offer full amount of Interest earned on income-tax refund as taxable income - The same was returned in the succeeding year. - HELD THAT:- it is only under a mistaken belief that the assessee failed to offer interest income during the impugned year, and the assessee otherwise was vigilant to have duly returned whatever intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income. There is no question of concealing or furnishing inaccurate particulars of income. 2. The learned CIT(A) has erred in confirming the penalty to extent of Rs. 87,096 under Section 271[l)(c) for the disallowance under Section 14A as per Rule 8D and addition of interest of income tax refund under Section 244A inasmuch as: (i) the interest income is offered for tax by the assessee company during the next financial year. (ii) the assessee company has neither furnished any inaccurate particulars of income nor concealed any income. The learned AO has erred in levying penalty inasmuch as the notice issued did not create any specific charges. 3. As transpires from the order of the authority below, the penalty for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance under section 14A of the Act was made. It is also a fact on record that this investment was made by the assessee in the financial year 2012-13 pertaining to Asst. Year 2013-14 i.e. the year preceding the impugned assessment year before us, which is Asst. Year 2014-15. The Tribunal accepted the assessee s contention that no new investment was made by the assessee during the year and the entire investment was sourced from tax free funds received from C.D. Integrated Services Ltd. The disallowance of administrative expenses which has been confirmed right upto the ITAT is only on account of the computation as provided under Rule 8D of the Rules. There is no dispute vis- -vis this fact. What turns from the above is that there is no actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot contest this addition either before the ld.CIT(A) or before the ITAT acknowledging its mistake. Since the facts reveals that the assessee had offered part of the interest on refund by it, surely the balance of Rs. 77,126/- was not offered to tax under a mistaken belief, which the assessee accepted and did not contest in appeal also. It is a fact on record that in the subsequent year, the assessee received another interest on refund of Rs. 75,644/- which was duly returned to tax. During assessment proceedings, when confronted with the interest component not returned by the assessee of Rs. 77,126/- ,the assessee offered an explanation to the effect that it was returned in the succeeding year. The reply of the assessee is reproduced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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