2010 (7) TMI 1113 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of penalty u/s 271(1)(c) of the Income Tax Act for the assessment year 2005-06.

Summary:
The revenue filed an appeal against the CIT(A) order regarding the deletion of penalty u/s 271(1)(c) for concealment of income and furnishing inaccurate particulars. The A.O. imposed the penalty due to a claim not routed through Profit & Loss A/c, alleging willful tax evasion by the assessee.

The assessee contended that concealment implies hiding income, while furnishing inaccurate particulars refers to providing non-conforming details. Incorrect claims do not constitute inaccurate particulars. The CIT(A) deleted the penalty, noting the assessee's explanation and supporting evidence for the deduction claimed as bad debt.

The revenue appealed, emphasizing the A.O.'s findings. The assessee argued for upholding the CIT(A) order, citing continuous income declaration on the loan and the Supreme Court's ruling that disallowed claims do not automatically attract penalty u/s 271(1)(c).

After considering the submissions and the Supreme Court's precedent, the Tribunal upheld the CIT(A) order, concluding no interference was necessary. The appeal of the assessee was dismissed.