2019 (3) TMI 142 - HC - Income Tax

Penalty u/s 271(1)(c) - furnishing inaccurate particulars of his income - exemption u/s 80-P claimed though it was excluded from the purview of Section 80-P of the Act w.e.f. 01.04.2007 - error in filing return - HELD THAT - It is pertinent to note that Section 80-P is a part of Chapter VI-A of the Act. It is also pertinent to note that under Section 80-B(5) of the Act, the gross total income means the total income computed in accordance with the provisions of the Act before making any deductions under Chapter VI-A of the Act. Evidently, the assessee had furnished inaccurate particulars of his income and had also concealed the particulars of his income which were deliberate and intentional. The Tribunal or the appellate authority committed no error or illegality in not accepting the plea of the assessee that the mistake in filing its return was bonafide and because of the amendment in the Finance Act, 2006 excluding the assessee from the purview of Section 80-P. Mistake in filing the return occurred - assessee lacked the services of professional chartered accountants can also not be accepted in as much as under Section 44-AB - HELD THAT - The assessee was required to get its account audited by an accountant as defined in Section 288(2)-Explanation, i.e. chartered accountant within the meaning of Chartered Accountants Act, 1949. It is not a case where the assessee has claimed deductions under any head which had been disallowed by the revenue but is a case where the assessee had concealed its total taxable income and furnished inaccurate details in its return. The appellant/assessee was not able to establish his bonafides regarding the inaccurate particulars furnished in his return. The proceedings under Section 271(1)(c) of the Act were rightly initiated against the assessee and the penalty was also rightly imposed on him.- Decided against assessee.

Issues Involved:
1. Confirmation of penalty under Section 271(1)(c) of the Income Tax Act for A.Y. 2007-08.
2. Incorrect claim tantamount to furnishing inaccurate particulars of income.
3. Consideration of bona fide and clerical mistakes by the ITAT.
4. Sustainability of penalty under Section 271(1)(c) based on transactions disclosed in the return.
5. Perverse finding of fact pertaining to "deliberate and intentional omission."

Issue-wise Detailed Analysis:

1. Confirmation of Penalty under Section 271(1)(c) for A.Y. 2007-08:
The appellant-assessee, a cooperative bank, filed its return for the assessment year 2007-08 showing a gross total income of ?20,16,000/-. During scrutiny, the Assessing Officer (A.O.) found that the assessee had claimed a tax credit of ?12.24 lacs as an expense and debited ?52,24,042.46/- as a loss from non-banking business, which were disallowed. The A.O. held that the assessee furnished inaccurate particulars of income, initiating penalty proceedings under Section 271(1)(c). The Deputy Commissioner imposed a penalty of ?21,70,500/-, which was confirmed by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal (ITAT).

2. Incorrect Claim Tantamount to Furnishing Inaccurate Particulars of Income:
The ITAT held that the appellant made an incorrect claim, amounting to furnishing inaccurate particulars of income, thus attracting penalty under Section 271(1)(c). The appellant argued that the discrepancy was a bona fide mistake due to the exclusion from Section 80-P benefits effective from 01.04.2007. However, the Tribunal dismissed this plea, emphasizing that the return filed by the assessee is the primary document for furnishing income particulars, and inaccuracies therein justify penalty imposition.

3. Consideration of Bona Fide and Clerical Mistakes by the ITAT:
The appellant contended that the errors in not adding the income tax paid amount of ?12,24,000/- and statutory provisions of ?52,24,042/- were inadvertent clerical mistakes due to ignorance of the amended Section 80P(4). The Tribunal rejected this argument, stating that the appellant had furnished inaccurate particulars and concealed income deliberately, as evidenced by the return details and lack of revised return even after notice.

4. Sustainability of Penalty under Section 271(1)(c) Based on Transactions Disclosed in the Return:
The appellant argued that the transactions were disclosed in the return based on accounts prepared by bank staff without professional advice. The Tribunal found that the appellant, a cooperative bank, was required to get its accounts audited by a chartered accountant under Section 44-AB. The Tribunal concluded that the appellant concealed its total taxable income and furnished inaccurate details, failing to establish bona fides regarding inaccuracies.

5. Perverse Finding of Fact Pertaining to "Deliberate and Intentional Omission":
The appellant challenged the Tribunal's finding of "deliberate and intentional omission" as contrary to the findings of the A.O. and CIT(A). The Tribunal upheld that the appellant's actions were deliberate and intentional, as the return showed gross total income without claiming deductions under Chapter VI-A, despite the appellant's knowledge of the amendment excluding it from Section 80-P benefits.

Conclusion:
The Tribunal concluded that the appellant furnished inaccurate particulars and concealed income deliberately. The penalty under Section 271(1)(c) was rightly imposed, and the appeal was dismissed, affirming the Tribunal's order dated 06.09.2012. The questions of law were answered against the appellant, emphasizing the strict liability for concealment or furnishing inaccurate particulars under Section 271(1)(c).

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