2014 (12) TMI 1153 - AT - Income Tax

Penalty under section 271(1)(c) - Held that - The assessee has disclosed all the particulars of the income and it cannot be stated that the assessee has concealed any particular and furnished incorrect particulars. Once proper disclosures have been made then penalty is not attracted in view of the decision of the hon ble Supreme Court in the case of CIT v. Reliance Petroproducts P. Ltd. 2010 (3) TMI 80 - SUPREME COURT . Further the return was filed on the basis of the certificate issued by the chartered accountant and even if it is a mistake on the part of the chartered accountant, the assessee can always take the shelter that he was under bona fide belief on the basis of such advice that deduction was claimed on the basis of such bona fide belief. Therefore, in our opinion this is not a fit case for levy of penalty - Decided in favour of assessee.

Summary

Issues:
Levy of penalty under section 271(1)(c) of the Income-tax Act, 1961.

Analysis:
1. The appeal was filed against the order of the Commissioner of Income-tax (Appeals) upholding the penalty of Rs. 51,01,720 under section 271(1)(c).
2. The appellant contended that the Commissioner erred in dismissing the appeal and misinterpreted the facts regarding the claim of deduction under section 80-IC, which was a debatable issue.
3. The appellant argued that the judgment of the Supreme Court in Union of India v. Dharamendra Textiles Processors [2008] 306 ITR 277 (SC) was misapplied by the Commissioner.
4. The Commissioner confirmed the penalty, noting that the appellant evaded queries regarding the deduction under section 80-IC, which became non-debatable after the Supreme Court's decision in Liberty India v. CIT [2009] 317 ITR 218 (SC).
5. During the appeal, the appellant claimed that the issue was debatable, and the deduction was made in good faith based on the chartered accountant's certificate.
6. The appellant argued that the penalty was not justified as there was no deliberate concealment, citing the decision in CIT v. Reliance Petroproducts P. Ltd. [2010] 322 ITR 158 (SC).
7. The Tribunal found merit in the appellant's submissions, stating that the issue was debatable, and the appellant had disclosed all relevant information in the return.
8. It was noted that the appellant filed the return before being aware of the Supreme Court's decision, and the penalty was not warranted as there was no deliberate concealment of particulars.
9. The Tribunal set aside the penalty, emphasizing that the appellant acted in good faith based on professional advice and there was no intention to conceal information.

This detailed analysis of the judgment highlights the key arguments, observations, and conclusions made by the Tribunal in the case concerning the levy of penalty under section 271(1)(c) of the Income-tax Act, 1961.