2013 (6) TMI 832 - AT - Income Tax

Summary

Issues Involved: Appeal against deletion of penalty u/s 271(1)(c) for inaccurate particulars of income.

Summary:
1. The Revenue appealed against the deletion of penalty u/s 271(1)(c) by the Commissioner of Income Tax (Appeals) for the assessment year 2000-01.
2. The assessment was reopened under section 147 disallowing set off of carry forward losses relating to an amalgamating company.
3. The Assessing Officer issued a notice under section 271(1)(c) for furnishing inaccurate particulars of income, which led to the penalty.
4. The Commissioner of Income Tax (Appeals) deleted the penalty based on legal precedents, including the decision of the Hon'ble Supreme Court in CIT Vs. Reliance Petroproducts Pvt. Ltd.
5. The Departmental Representative supported the penalty, while the counsel for the assessee argued against it, citing the admission of the appeal by the High Court.
6. The Tribunal held that the penalty was not justified as the High Court admitted the appeal involving a substantial question of law, and also based on the Supreme Court's ruling that a claim not sustainable in law does not amount to furnishing inaccurate particulars of income.
7. Consequently, the penalty u/s 271(1)(c) was deleted, and the appeal of the Revenue was dismissed.

Judgment by Challa Nagendra Prasad, JM:
- The appeal was filed by the Revenue against the deletion of penalty u/s 271(1)(c) for inaccurate particulars of income for the assessment year 2000-01.
- The Tribunal considered the reassessment disallowing the claim for carry forward and set off of business and depreciation losses, leading to the penalty under section 271(1)(c).
- The Commissioner of Income Tax (Appeals) relied on legal precedents, including the decision of the Hon'ble Supreme Court, to delete the penalty, emphasizing that mere disallowance of a claim does not automatically warrant a penalty.
- The Tribunal noted the admission of the appeal by the High Court, indicating a substantial question of law, and followed the Mumbai Bench's decision to hold that the penalty was not exigible.
- Based on the Supreme Court's ruling that a claim not sustainable in law does not amount to inaccurate particulars of income, the penalty was deleted, and the Revenue's appeal was dismissed.