2004 (4) TMI 271 - AT - Income Tax

Summary

Issues: Appeal against deletion of penalty under section 271(1)(c) for alleged concealment of income.

Analysis:
1. The appeal by the Revenue challenged the deletion of a penalty under section 271(1)(c) amounting to Rs. 1,58,544 by the CIT(A) on the grounds that no concealment was involved. The Tribunal examined the orders of the lower authorities and the documents on record.

2. The assessee had claimed deduction of interest payments made to the Department in different assessment years, but the deductions were disallowed by the Assessing Officer (AO) as not deductible. The CIT(A) re-examined the issue and found that the interest payments were debited from taxable income, indicating no concealment. The CIT(A) deleted the penalty based on this reasoning.

3. The Revenue, in its appeal before the Tribunal, heavily relied on the AO's order. However, the Tribunal considered the judgment of the Rajasthan High Court, which stated that claiming debatable deductions does not amount to concealment of income or furnishing inaccurate particulars for tax evasion.

4. After considering the submissions and the lower authorities' orders, the Tribunal concluded that the claim made by the assessee was debatable. Following the precedent set by the Rajasthan High Court, the Tribunal upheld the CIT(A)'s decision to delete the penalty, as there was no merit in the penalty levied by the Revenue.

5. Consequently, the Tribunal dismissed the appeal filed by the Revenue, affirming the decision to delete the penalty under section 271(1)(c) as there was no concealment of income involved in the case.