2016 (11) TMI 592 - AT - Income Tax

Levy of penalty u/s 271(1)(c) - disallowance u/s 80IB - Held that - inaccurate particulars was not defined anywhere in the Act and, therefore, it was held that furnishing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. Reading the words in conjunction, they must mean the details supplied in the Return, which are not accurate, not exact or correct, not according to truth or erroneous. Must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under Section 271(1)(c) of the Act. Even if a wrong claim is made by the assessee that itself does not tantamount to concealment of income. - Decided in favour of assessee

Summary

Issues:
Levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 for disallowance under section 80IB.

Detailed Analysis:

1. Background and Grounds of Appeal:
The appellant contested the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961, amounting to ?12,03,030, due to the disallowance under section 80IB. The assessment was completed with the total income assessed at ?39,85,607 against the claimed deduction of ?38,93,297. The penalty was upheld by the Commissioner of Income Tax (Appeal), leading to the appeal before the Tribunal.

2. Ex-Parte Proceedings and Arguments:
During the hearing, the appellant was absent despite notices, leading to ex-parte proceedings. The Departmental Representative defended the penalty. The Assessing Officer treated the claimed deduction as income from other sources, leading to the penalty under section 271(1)(c).

3. Legal Interpretation and Precedents:
The Tribunal analyzed the legal provisions of section 271(1)(c) in light of relevant case laws. Referring to the decision in Reliance Petro Products Pvt. Ltd. and CIT vs Ajaib Singh & Company, it was noted that a mere incorrect claim does not amount to furnishing inaccurate particulars of income. The essence of accurate particulars was emphasized, highlighting the necessity of factual inaccuracies for invoking the penalty.

4. Interpretation of Section 271(1)(c):
The Tribunal delved into the interpretation of Section 271(1)(c), emphasizing the importance of accurate and detailed information in the Return. It was clarified that the provision requires factual inaccuracies or deliberate omissions to attract the penalty. The element of mens rea was discussed, emphasizing the need for intentional wrongdoing to invoke the penalty.

5. Final Decision and Ruling:
After a detailed analysis of legal provisions and precedents, the Tribunal concluded that the penalty under section 271(1)(c) was not applicable in this case. The Tribunal directed the Assessing Officer to delete the penalty, ruling in favor of the appellant. The appeal was allowed, and the decision was pronounced in the presence of the Departmental Representative.

In conclusion, the judgment analyzed the applicability of penalty under section 271(1)(c) concerning the disallowance under section 80IB. Through a meticulous legal interpretation and reliance on relevant case laws, the Tribunal ruled in favor of the appellant, emphasizing the necessity of factual inaccuracies and mens rea for invoking such penalties.