2017 (1) TMI 858 - AT - Income Tax

Penalty imposed under section 271(1)(c) - wrong claim of indexed cost of acquisition and wrong claim of exemption under section 54F - concealment of income and furnishing inaccurate particulars - Held that - We have already seen the meaning of the word particulars in the earlier part of this order. 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. We 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. In the light of the foregoing discussion, We are of the considered opinion that at least penalty is not leviable, therefore, the ld. Assessing Officer was rightly directed to delete the penalty, therefore, we find no infirmity in the conclusion of the Ld. Commissioner of Income Tax (Appeals). - Decided in favour of assessee

Summary

Issues:
Deletion of penalty under section 271(1)(c) of the Income Tax Act for furnishing inaccurate particulars of income.

Analysis:
The judgment dealt with the issue of whether the penalty of ?19,64,476 imposed under section 271(1)(c) of the Income Tax Act should be deleted for furnishing inaccurate particulars of income. The Revenue contended that the penalty was justified as the assessee provided inaccurate details regarding indexed cost of acquisition and exemption claim under section 54F. The Assessing Officer disallowed the claims and levied the penalty, which was later deleted by the Commissioner of Income Tax (Appeals). The Tribunal analyzed the facts and legal provisions, including the decision in Reliance Petro Products Pvt. Ltd. case, emphasizing that making a wrong claim does not necessarily amount to furnishing inaccurate particulars of income. The Tribunal highlighted that inaccurate particulars must involve a deliberate act, and incorrect claims do not automatically lead to penalty under section 271(1)(c).

The Tribunal scrutinized the language of section 271(1)(c) of the Act, emphasizing that the provision requires concealment or furnishing inaccurate particulars of income. It was noted that the term "particulars" refers to details of a claim, and inaccurate particulars must be deliberate and not merely incorrect claims. The judgment cited various legal precedents to establish that mens rea is essential for imposing the penalty under section 271(1)(c), and incorrect claims do not necessarily indicate inaccurate particulars. The Tribunal highlighted that the Return filed by the assessee is crucial, and penalties can only be imposed if the particulars are found to be deliberately inaccurate.

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the deletion of the penalty by the Commissioner of Income Tax (Appeals). The judgment underscored that the penalty under section 271(1)(c) cannot be levied solely based on incorrect claims made by the assessee, as there must be a deliberate act of furnishing inaccurate particulars. The decision provided a detailed analysis of the legal provisions and precedents to support the conclusion that the penalty was not justified in this case.

This comprehensive analysis of the judgment highlights the key legal principles and interpretations regarding penalties under section 271(1)(c) of the Income Tax Act, emphasizing the importance of deliberate intent in furnishing inaccurate particulars of income to warrant such penalties.