2011 (1) TMI 656 - HC - Income Tax

Levy of penalty u/s 271(1)(c) - It is apparent that neither the Assessing Officer nor the Commissioner (Appeals) have stated as to what are the inaccurate particulars that have been furnished by the assessee or as to what is the nature of the concealment made by the assessee - The Tribunal upon appreciation of the evidence on record has found as a matter of fact that all primary and material facts were disclosed by the assessee and was of the view that the assessee had made a bonafide claim and that holding a different legal opinion cannot lead to penalty in respect of the items claimed - In the absence of any findings as regards furnishing inaccurate particulars or concealment of material particulars the Tribunal was justified in setting aside the penalty.

Summary

Issues:
Challenge to order under section 260A of the Income Tax Act regarding penalty deletion for assessment year 2003-04.

Analysis:
1. The appellant-Revenue challenged the order by the Income Tax Appellate Tribunal regarding the deletion of penalty for assessment year 2003-04. The respondent assessee declared a business loss in the return of income, which the Assessing Officer determined differently disallowing expenses and not allowing set off against other income. The Commissioner (Appeals) and the Tribunal upheld the Assessing Officer's decision.

2. The Assessing Officer initiated penalty proceedings under section 271(1)(c) of the Act for concealing income particulars. The Tribunal found that the assessee disclosed all primary facts and made a bonafide claim, not deliberately furnishing inaccurate particulars. The Tribunal cited the Dilip N. Shroff case and the Reliance Petroproducts Pvt. Ltd. case to support its decision.

3. The Tribunal found that no inaccurate particulars were furnished by the assessee, and the penalty was based on a wrong claim. Citing the Supreme Court's principle, the Tribunal set aside the penalty as there was no concealment of material particulars. The Tribunal's decision was upheld as legally sound, dismissing the appeal by the appellant-Revenue.

4. The Tribunal's decision was deemed justified as no legal error was committed, and no substantial question of law arose from the case. The appeal was dismissed based on the findings that the Tribunal's order did not warrant interference.