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2020 (4) TMI 542 - AT - Income TaxPenalty u/s. 271(1)(c) - assessee submitted a chart showing the details of quantum additions/disallowance either deleted by the Tribunal or set aside to the Assessing Officer and also not levying of penalty on identical addition/disallowance made by the Assessing Officer in earlier assessment years - HELD THAT - Most of the additions/disallowance made by the AO were either deleted or set-aside by the Tribunal to the Assessing Officer. In some of the cases the AO himself not initiated penalty proceedings in earlier assessment years where similar additions/disallowance were made. CIT(A) has rightly appreciated the submissions of the assessee and taking note of the fact that additions/disallowances were either deleted or set aside, he held that there was no concealment of income or furnishing of inaccurate particulars by the assessee in making its claims and the penalty was levied on mere change of opinion and the Ld.CIT(A) has rightly deleted the penalty levied for all these three assessment years. AO levied penalty on the disallowance made u/s. 14A while computing income under normal provisions of the Act as well as under book profits computation. Penalty cannot attract simply when there is an addition/disallowance is made. There is no concealment of income or furnishing of inaccurate particulars in making claim u/s. 14A - no penalty is attracted on disallowance made u/s. 14A - Decided against revenue.
Issues:
Revenue's appeal against deletion of penalty under section 271(1)(c) of the Income Tax Act by the Commissioner of Income Tax (Appeals) for assessment years 2005-06, 2006-07, and 2007-08. Analysis: The appeals were filed by the revenue challenging the orders of the Commissioner of Income Tax (Appeals) deleting the penalty imposed under section 271(1)(c) of the Act for the mentioned assessment years. The Counsel for the assessee argued that the additions/disallowances on which penalties were levied were either deleted or set aside by the Tribunal. It was contended that there was no concealment of income or furnishing of inaccurate particulars by the assessee. The Counsel highlighted that penalties were deleted by the Commissioner of Income Tax (Appeals) based on the consistency rule, as the Assessing Officer did not impose penalties on similar additions in earlier years. The Counsel strongly supported the deletion of penalties by the Commissioner of Income Tax (Appeals). During the hearing, the Departmental Representative supported the orders of the Assessing Officer. The Tribunal examined the submissions and a chart detailing the quantum additions/disallowances that were either deleted by the Tribunal or set aside to the Assessing Officer. It was noted that the Assessing Officer did not initiate penalty proceedings in earlier years for similar additions/disallowances. The Tribunal agreed that there was no concealment of income or furnishing of inaccurate particulars by the assessee. It was observed that penalties cannot be levied merely on the basis of additions/disallowances, especially in cases like disallowance under section 14A of the Act where there was no concealment of income. Consequently, the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) and dismissed the Revenue's appeals. In conclusion, the Tribunal affirmed that penalties were rightly deleted by the Commissioner of Income Tax (Appeals) for the assessment years in question. It was emphasized that penalties cannot be imposed solely based on additions/disallowances, especially in cases where there was no concealment of income or furnishing of inaccurate particulars. Therefore, the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) and dismissed the Revenue's appeals.
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