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Issues involved: Reduction of penalty u/s 271(1)(c) of the Income Tax Act.
Summary: The Appellate Tribunal ITAT Mumbai heard an appeal filed by the revenue against the order of the Ld. CIT (A) reducing the penalty from Rs. 4,04,63,019/- to Rs. 7.75 lakhs. The case involved the assessee's claim of bad debts and long term capital loss, which were denied by the Assessing Officer. The penalty notice u/s 271(1)(c) was issued based on these disallowed claims. In the assessment proceedings, the Assessing Officer disallowed the claim of bad debts and long term capital loss, leading to the imposition of a penalty of Rs. 4,04,63,019/-. The Ld. CIT (A) reduced the penalty to Rs. 2,41,92,646/-. Upon further appeal, the penalty amount was further reduced to Rs. 7.75 lakhs, as the loans and advances in question were to subsidiary or associate concerns, proving their genuineness. During the appeal, the revenue contended that the penalty reduction was illegal, citing the Assessing Officer's findings and the provisions of sec. 271(1)(c) of the Act. The assessee argued that there was no inaccurate particulars or concealment of income, only a wrong claim made. The ITAT upheld the Ld. CIT (A)'s decision, stating that the assessee was not guilty of furnishing inaccurate particulars of income. The Tribunal concluded that since the transactions were not false and the assessee was not found guilty of furnishing wrong particulars of income, the penalty reduction was justified. The appeal was dismissed, and the impugned order did not require any interference.
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