2015 (1) TMI 1210 - AT - Income Tax

Penalty u/s 271(1)(c) - deduction u/s 80IC - whether merely claim of deduction U/s 80IC would not lead to the conclusion that assessee has filed incorrect particulars of income or concealed any particulars of income? - Held that - The meaning of the word particulars used in section 271(1)(c) would embrace the details of the claim made. Where no information given in the return in found to be incorrect of inaccurate, the assessee can t be the held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision can t be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, nor exact or correct, no according to the truth or erroneous. Considering the facts of the case, therefore, it is noted that all the particular and primary facts are duly disclosed by the appellant. The books of accounts are audited and Auditor s certificate u/s 80IC was submitted. Therefore, looking into the entirety of the facts and the case laws discussed above, in my opinion, there is no concealment of income or furnishing of inaccurate particulars in this case. The penalty imposed by the A.O. is, therefore deleted - Decided in favour of assessee.

Summary

Issues:
1. Whether the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 was rightly deleted by the CIT(A) based on certain judgments?
2. Whether the deductions claimed under section 80IC were correctly reduced during the assessment proceedings?
3. Whether the appellant had furnished inaccurate particulars of income or concealed any particulars of income justifying the penalty imposition?

Analysis:

Issue 1: Penalty Imposed under Section 271(1)(c)
The appeal by the Revenue challenged the deletion of the penalty imposed under section 271(1)(c) by the CIT(A). The Revenue contended that the CIT(A) erred in deleting the penalty by relying on a previous order of the ITAT, Chandigarh. The key contention revolved around the treatment of freight subsidy and Sales Tax Deferment Rebate as profits derived from industrial undertakings eligible for deduction under section 80IC. The ITAT considered various judgments and held that the appellant had disclosed all primary facts in the return, and making an incorrect claim does not amount to furnishing inaccurate particulars. The Tribunal found no concealment of income or inaccurate particulars, upholding the CIT(A)'s decision to delete the penalty.

Issue 2: Deductions Claimed under Section 80IC
During the assessment proceedings, deductions claimed under section 80IC were reduced, including amounts related to Transport Subsidy, Bank Interest, and Mibor Premium. The penalty proceedings under section 271(1)(c) were initiated, and a 100% penalty was levied. However, the CIT(A) found that similar additions had been deleted in a previous assessment year by the ITAT, Chandigarh Bench. The CIT(A) concluded that the appellant had not concealed any particulars of income or furnished inaccurate particulars, as all relevant details were disclosed in the return. The Tribunal upheld the CIT(A)'s decision, emphasizing that a mere claim of deduction under a bonafide belief does not constitute concealment of income or furnishing inaccurate particulars.

Issue 3: Furnishing Inaccurate Particulars of Income
The Tribunal considered the principles laid down by the Hon'ble Supreme Court regarding the meaning of "particulars" under section 271(1)(c) of the Income Tax Act. It was reiterated that unless there is concealment of income or furnishing of inaccurate particulars, the penalty provision cannot be invoked. The Tribunal, following the precedent set in a previous case, upheld the CIT(A)'s decision to delete the penalty, emphasizing that making an incorrect claim does not amount to furnishing inaccurate particulars. Therefore, the Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s order.

In conclusion, the ITAT Chandigarh upheld the CIT(A)'s decision to delete the penalty imposed under section 271(1)(c) based on the appellant's disclosure of all primary facts and the absence of concealment or inaccurate particulars. The Tribunal emphasized that a mere claim of deduction under a bonafide belief does not constitute grounds for penalty imposition, as clarified by relevant legal precedents.