Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (5) TMI 916 - ITAT DELHIPenalty u/s 271(1)(c) - addition being speculative loss on derivative transactions which according to him cannot be set off against business income and disallowance u/s 14A r.w.r 8D(2)(iii) of the Rules - HELD THAT:- The Hon’ble Supreme Court in the case of CIT vs Reliance Petro Products Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] has held that making of an incorrect claim in law cannot tantamount to furnishing of inaccurate particulars. Merely because the assessee claimed deduction which has not been accepted by the Revenue, the penalty u/s 271(1)(c) is not attracted. If the contention of the Revenue is accepted, the assessee would be liable for penalty u/s 271(1)(c) of the Act in every case where the claim made by the assessee is not accepted by the AO for any reason. That is clearly not the intendment of the legislature. In view of the above discussion, we are of the considered opinion that the learned CIT(A) is fully justified in cancelling the penalty levied by the AO u/s 271(1)(c) . Even otherwise also, a perusal of the notice issued by the Assessing Officer u/s 274 r.w.s 271 of the Act, dated 29.12.2011, a copy of which is placed at page 87 of the paper book shows that it is in only a printed form without striking off the inappropriate words in the said notice. Therefore, it is not understood as to under which limb of the provisions of section 271(1)(c), the Assessing Officer has initiated penalty proceedings i.e. whether for concealment of income or for furnishing of inaccurate particulars of such income. The Hon’ble Delhi High Court in the case of PCIT vs Sahara India Life Insurance Company Ltd. [2019 (8) TMI 409 - DELHI HIGH COURT] has dismissed the appeal filed by the Revenue on identical circumstances, the relevant observations of which have already been reproduced in the preceding paragraphs while recording the arguments of the learned counsel for the assessee. We, therefore, hold that the notice issued by the Assessing Officer is bad in law since it did not specify under which limb of section 271(1)(c) of the Act, the penalty proceedings have been initiated i.e. whether for concealment of income or for furnishing of inaccurate particular of income. In this view of the matter, we uphold the order of the learned CIT(A) cancelling the penalty levied by the Assessing Officer. The grounds raised by the Revenue are accordingly dismissed.
|