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2019 (1) TMI 853 - ITAT DELHIPenalty u/s 271(1)(c) - deduction u/s 54F - Held that:- Coming to examine the case under explanation 1 to 271(1)(c), we have to examine whether the case in question falls within the other two limbs viz. clause (A) and (B) and effect thereof. Clause (A) applies when an assessee fails to furnish explanation or when an explanation is found to be false. Clause (B) applies to cases where explanation is offered but the assessee is not able to substantiate the explanation. In such cases, we have to examine two conditions: (1) Whether the assessee has been able to show that his explanation was bona fide; (2) whether the assessee had furnished and disclosed facts and material relating to computation of his income. Onus of establishing that the assessee satisfies the two conditions is on the assessee. Both the conditions have to be satisfied. The assessee satisfies the twin conditions, penalty is not be imposed. As far as the explanation to the section 271(1)(c) is concerned, the assessee has stated all the facts and there is no allegation that she has not furnished the full facts and materials. She had stated that she had reasonable grounds to hold the view that she was entitled to deduction under section 54F, as she had done everything under her control and invested the consideration for a residential house. Although the explanation could not be substantiated, the explanation could not be said to be lacking in bona fide. It is also seen that the assessee had filed return for the assessment year 09-10 in July 2009 whereas the house was to be reconstructed within the outer limit by January 2011. Thus, the assessee cannot be accused of furnishing inaccurate particulars of income as at the time of filing return of income she had no idea that the house she was investing in will not get completed within the stipulated time - On the facts of the case, a case of furnishing of inaccurate particulars of income is not made out - Decided against revenue.
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