2016 (3) TMI 1336 - AT - Income Tax

Penalty levied u/s. 271(1)(c) - addition u/s 43B - addition of duty, cess, taxes and EPF as payments have been made after due date in the relevant years - Held that - The assessee has filed complete particulars in respect to claim of deduction u/s. 43B of the Act and when all particulars were filed in the Tax Audit Report and its computation of income along with return of income, it cannot be a case of furnishing of inaccurate particulars of income or concealment of income. It is only a case of opinion whether the deduction is to be allowed or not. Once this is the case, the assessee is not liable for penalty u/s. 271(1)(c) of the Act. Respectfully following the decision of Hon ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. 2010 (3) TMI 80 - SUPREME COURT , we confirm the order of CIT(A) deleting the penalty. Appeal of revenue is dismissed.

Summary

Issues involved:
- Appeal against deletion of penalty under section 271(1)(c) of the Income Tax Act, 1961.

Detailed Analysis:
1. The appeal by the revenue challenged the deletion of penalty under section 271(1)(c) of the Act by the CIT(A). The case originated from an assessment for the Assessment Year 2004-05 where the AO disallowed certain payments under section 43B of the Act amounting to Rs. 1,17,04,699. The CIT(A) confirmed the disallowance partially, and the ITAT upheld the disallowance to the extent of Rs. 82,12,119. Subsequently, the AO initiated penalty proceedings under section 271(1)(c) and imposed a penalty of Rs. 29,46,098. The CIT(A) deleted the penalty, emphasizing that the appellant disclosed all relevant facts and there was no intention to evade tax liability. The revenue appealed to the Tribunal challenging the deletion of the penalty.

2. The Tribunal analyzed the case and referred to the decision of the Hon'ble Supreme Court in CIT Vs. Reliance Petro Products Pvt. Ltd. The Supreme Court clarified that mere unsustainable claims in the return do not amount to furnishing inaccurate particulars regarding income. The Tribunal noted that the assessee provided complete details regarding the claim of deduction under section 43B of the Act during assessment proceedings. The Tribunal concluded that since all particulars were disclosed in the Tax Audit Report and computation of income, it did not constitute furnishing inaccurate particulars or concealment of income. Therefore, the Tribunal upheld the CIT(A)'s decision to delete the penalty under section 271(1)(c) based on the principles laid down by the Supreme Court.

3. The Tribunal dismissed the revenue's appeal, affirming that the assessee had fulfilled its obligation by providing all necessary details and that the penalty under section 271(1)(c) was not applicable in this case. By following the precedent set by the Supreme Court, the Tribunal confirmed the deletion of the penalty by the CIT(A) and upheld that the appeal of the revenue was without merit.