2013 (5) TMI 899 - AT - Income Tax

Summary

Issues involved: Appeal against penalty order u/s 271(1)(c) of the IT Act for AY 2002-03.

Details of the Judgment:

1. Issue 1 - Concealment of Income:
- The assessee received a gift of immovable property and claimed it as exempt income.
- Assessing Officer treated the gift as income u/s 28(iv) of the Act.
- Tribunal confirmed the addition, and penalty proceedings u/s 271(1)(c) were initiated.
- Commissioner of Income Tax(Appeals) deleted the penalty, stating no concealment or inaccurate particulars of income.
- Revenue argued that the gift was for professional services rendered, not love and affection.
- Assessee contended the gift was out of love and affection, not for services rendered.
- Tribunal noted the assessee disclosed all relevant facts and particulars regarding the gift.
- Merely because the claim was not accepted does not attract penalty provisions.

2. Issue 2 - Legal Precedents:
- Commissioner of Income Tax(Appeals) relied on the decision of the Supreme Court in CIT vs Reliance Petro Products Ltd.
- The Supreme Court held that incorrect claim in law does not amount to furnishing inaccurate particulars.
- Merely making an unsustainable claim does not lead to penalty u/s 271(1)(c).
- The case did not involve concealment or furnishing inaccurate particulars of income.

3. Conclusion:
- The Tribunal upheld the decision of the Commissioner of Income Tax(Appeals) to delete the penalty u/s 271(1)(c).
- The appeal of the revenue was dismissed, and the impugned order was upheld.

This judgment highlights the importance of disclosing all relevant facts and particulars, even if a claim is not accepted, to avoid penalties for concealment or inaccurate particulars of income. It also emphasizes the significance of legal precedents in determining the applicability of penalty provisions under the IT Act.