2017 (6) TMI 1050 - HC - Income Tax

Penalty u/s 271(1)(c) - disallowance of loss - Held that - The loss on Information Service Division was subsequently allowed by the Assessing Officer in the consequential orders. Therefore, the major amount itself does not call for penalty. The balance three amounts are bona fide claims. The same has been appreciated by the CIT(A) and the Tribunal after considering the entire material on record. In the facts of the present case, the Tribunal has rightly relied on the judgment in the case of Commissioner of Income Tax Vs. Reliance Petro Products (P) Ltd., (2010 (3) TMI 80 - SUPREME COURT). No substantial questions of law arise.

Summary

Issues:
- Whether the Tribunal was justified in deleting the penalty under Section 271(1)(c) of the Income Tax Act for the Assessment Year 1998-99.
- Whether the Tribunal's decision aligns with relevant legal precedents and the facts of the case.

Analysis:
1. The Revenue filed an appeal challenging the deletion of penalty amounting to ?42,48,656 under Section 271(1)(c) of the Act. The grounds of appeal raised substantial questions of law related to the assessee's failure to offer explanations for certain disallowances, the sustainability of quantum additions by the CIT(A) and the Tribunal, and the accuracy of particulars furnished by the assessee to reduce tax liability.

2. The appellant argued that the CIT(A) and the Tribunal erred in setting aside the penalty imposed by the Assessing Officer, contending that the wrong claim made by the assessee intentionally warranted penalty under Section 271(1)(c) of the Act. However, upon review of the orders passed by the Authorities and the Tribunal, it was noted that the loss on Information Service Division was later allowed by the Assessing Officer, and the remaining claims were considered bona fide by the CIT(A) and the Tribunal after examining the material on record.

3. The Tribunal's decision was based on the judgment of the Apex Court in the case of Commissioner of Income Tax Vs. Reliance Petro Products (P) Ltd., (2010), 322 ITR 158, which was deemed applicable to the present case. It was concluded that no substantial questions of law arose from the facts presented, and the Tribunal's reliance on the legal precedent was found to be justified.

4. Ultimately, the appeal was dismissed, and no costs were imposed. The Tribunal's decision to delete the penalty under Section 271(1)(c) was upheld based on the assessment of the facts and legal principles involved, including the applicability of relevant judicial precedents to the case at hand.