2019 (5) TMI 1163 - HC - Income Tax

Penalty u/s 271(1)(C) - claim u/s 80P denied - HELD THAT - The above appeal arises out of a common order passed by the Income Tax Appellate Tribunal. Revenue came up with yet another appeal. The same was dismissed by another bench of this Court in Pr. CIT VERSUS M/S ELURU CO-OPERATIVE HOUSE MORTGAGE SOCIETY LIMITED 2018 (3) TMI 1765 - TELANGANA AND ANDHRA PRADESH HIGH COURT stating that the mere fact that the respondent/assessee made a claim, even if found to be unjustified, would not amount to it furnishing any inaccurate particulars regarding its income, whereby a penalty can be levied u/s 271(1)(c) . Therefore, following the same, this appeal is also dismissed.

Summary

Issues Involved:
1. Appeal under Section 260A of the Income Tax Act, 1961 regarding cancellation of penalty under Section 271(1)(c) for concealment of inaccurate particulars in claim under Section 80P.
2. Justification of the Tribunal's decision to annul the concealment penalty under Section 271(1)(c) despite inaccurate particulars of income furnished by the respondent-assessee.

Analysis:

Issue 1:
The appeal before the High Court pertains to the cancellation of penalty under Section 271(1)(c) of the Income Tax Act, 1961. The primary question raised is whether the Tribunal was correct in upholding the cancellation of penalty imposed by the Assessing Officer for the concealment or furnishing of inaccurate particulars by the respondent-assessee in relation to the claim made under Section 80P of the Income Tax Act. The Assessing Officer disallowed the claim under Section 80P, which was upheld by the Tribunal. The crux of the issue lies in determining the legality of the cancellation of penalty in this context.

Issue 2:
The second issue questions the justification of the Tribunal's decision to annul the concealment penalty under Section 271(1)(c) of the Income Tax Act, 1961. Despite the respondent-assessee furnishing inaccurate particulars of income, the Tribunal disregarded the language of the section and annulled the penalty. This raises a significant legal query regarding the interpretation and application of the law in cases of inaccurate particulars furnished by the taxpayer.

The High Court, comprising Sri V. Ramasubramanian and Ms. J. Uma Devi, JJ., heard arguments from Mr. B. Narasimha Sarma for the appellant and Mr. A.V. Siva Kartikeya for the respondent. The appeal stemmed from a common order by the Income Tax Appellate Tribunal in I.T.A. Nos. 564 and 615 of 2014, specifically arising from I.T.A. No. 615 of 2014. Additionally, another appeal related to I.T.A. No. 564 of 2014 was dismissed by a different bench of the Court on 13.03.2018, leading to the dismissal of the current appeal as well. The Court ordered no costs to be awarded, and any pending miscellaneous petitions were directed to be closed as a consequence of the judgment.