2017 (5) TMI 970 - AT - Income Tax

Penalty u/s.271(1(c) - Held that - As decided in own case of assessee there is no concealment of any fact nor have any additional facts been discovered proving the earlier disclosure in the return to be false or wrong. The findings recorded by the CIT(A) are just and proper and after consideration of various judicial pronouncements. Respectfully following the order of the Tribunal in assessee s own case, which has been upheld by the Hon ble Bombay High Court as well as the judgment of the Hon ble Supreme Court in the case of Reliance Petroproducts Ltd. (2010 (3) TMI 80 - SUPREME COURT) we see no reason to interfere in the findings of the CIT(A) deleting the penalty so levied by the AO. - Decided in favour of assessee.

Issues Involved:
1. Imposition of penalty under Section 271(1)(c) of the Income Tax Act.
2. Allegations of concealment of income or furnishing inaccurate particulars.
3. Difference of opinion between the Assessee and the Assessing Officer (AO) on the interpretation of law.
4. Applicability of judicial precedents on the matter of penalty.

Issue-wise Detailed Analysis:

1. Imposition of penalty under Section 271(1)(c) of the Income Tax Act:
The appeals filed by the Revenue challenge the order of the CIT(A) for the A.Y. 1998-99 and 1999-2000 concerning the penalty imposed under Section 271(1)(c) of the Income Tax Act. The CIT(A) deleted the penalty, observing that the assessment was based on facts disclosed by the appellant in the return of income and during assessment proceedings. The AO did not find any material fact undisclosed or incorrectly disclosed by the appellant.

2. Allegations of concealment of income or furnishing inaccurate particulars:
The CIT(A) noted that the AO did not allege or observe any concealment of income or furnishing of inaccurate particulars in the assessment order. The assessment was made on the basis of a different opinion from the appellant's point of view. The CIT(A) emphasized that penalty proceedings are distinct from assessment proceedings, and the findings in the assessment order are not conclusive for deciding the imposition of penalty. The CIT(A) found that the appellant had made full disclosures and provided necessary documents during the assessment proceedings.

3. Difference of opinion between the Assessee and the Assessing Officer (AO) on the interpretation of law:
The CIT(A) highlighted that the assessment was made based on a difference of opinion on the same set of facts fully disclosed by the appellant. The CIT(A) referred to various judicial precedents, including the Hon'ble Supreme Court's decision in K.C. Builders, which held that mere omission from the return of an item of receipt does not amount to concealment unless there is evidence of intentional suppression. The CIT(A) concluded that the appellant's case was not covered by Explanation 1 to Section 271(1)(c) as the explanation offered by the appellant was not found to be false.

4. Applicability of judicial precedents on the matter of penalty:
The CIT(A) referred to several judicial decisions, including the Hon'ble Supreme Court's ruling in Reliance Petroproducts Ltd., which held that making an incorrect claim in law does not amount to furnishing inaccurate particulars. The CIT(A) also cited the Hon'ble ITAT Mumbai Bench's decision in Roborant Investments (P) Ltd., which held that genuine differences of opinion on legal matters are outside the scope of Explanation 1 to Section 271(1)(c). The CIT(A) observed that the appellant's claims were made under a bona fide belief and that the assessment was based on different interpretations of law.

Tribunal's Findings:
The Tribunal upheld the CIT(A)'s order, noting that the assessee had furnished full particulars in the return of income and that the issue was debatable, as evidenced by the referral to a Special Bench. The Tribunal referenced the Hon'ble Supreme Court's decision in Reliance Petroproducts Ltd., which emphasized that no penalty can be imposed unless there is a finding of concealment or furnishing of inaccurate particulars. The Tribunal also considered its own previous decisions and the Hon'ble Bombay High Court's dismissal of the Revenue's appeal against the Tribunal's order in the assessee's own case for earlier years.

Conclusion:
The Tribunal found no reason to interfere with the CIT(A)'s order deleting the penalty imposed under Section 271(1)(c), as the facts and circumstances were consistent with previous years where similar penalties were deleted. The appeals of the Revenue were dismissed, and the order was pronounced in the open court on 17/05/2017.

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