2024 (3) TMI 1121 - AT - Income Tax

Penalty u/s 271(1)(c) - bogus claim u/s 80C deduction(s) is an instance of furnishing inaccurate particulars of income - HELD THAT - It as a fit case for confirming the impugned penalty after having found the assessee having concealed his taxable income. A deviation regarding applicability of the statutory twin limbs of concealment of taxable income vis- -vis furnishing of inaccurate particulars thereof is not sustainable in law in light of hon ble jurisdictional high court s decision in Mohd. Farhan A. Shaikh 2021 (3) TMI 608 - BOMBAY HIGH COURT (LB) - The impugned penalty is deleted in very terms. Penalty u/s 270A(8) - non specification of corresponding limb(s) of under-reporting of income in consequence of any mis-reporting - HELD THAT - Revenue could not dispute the clinching fact that although the learned lower authorities have levied 200% penalty(ies) in assessee s case going by sec. 270A(8) on one hand; whereas they nowhere specify the corresponding limb(s) of under-reporting of income in consequence of any mis-reporting thereof; as prescribed sub-sec.( 9) containing (a) to (f) clauses. Faced with this situation we adopt stricter interpretation as Dilip Kumar And Co. Ors. 2018 (7) TMI 1826 - SUPREME COURT and conclude that these twin penalties also deserve to be deleted.

Summary

Issues involved: Appeals against penalties u/s 271(1)(c) for A.Y. 2016-2017 and penalties u/s 270A for A.Ys. 2017-2018 and 2018-2019.

For A.Y. 2016-2017 (u/s 271(1)(c)):
The assessee's appeal challenged penalties imposed for raising bogus claims of sec. 80C deductions. The Assessing Officer found the claim to be inaccurate, but the NFAC deemed it as concealment of income. The Tribunal, citing legal precedent, ruled in favor of the assessee, stating that the deviation in applying the twin limbs of concealment and inaccurate particulars was not sustainable in law. The penalty was thus deleted, and the assessee succeeded in the appeal.

For A.Ys. 2017-2018 and 2018-2019 (u/s 270A):
The penalties imposed under sec. 270A were challenged for under-reporting income without specifying the misreporting limb as required by law. Following a stricter interpretation, the Tribunal referred to a Supreme Court case and concluded that the penalties for these assessment years should also be deleted. The appeals for these years were allowed accordingly.

The Tribunal allowed all three appeals, directing the deletion of penalties for the respective assessment years. The decision was based on the incorrect application of penalty provisions by the lower authorities and in line with legal precedents.