2012 (2) TMI 71 - AT - Income Tax

Penalty u/s 271(1)(c) revised return filed - deduction u/s 80G claimed on property gifted to Trust deduction disallowed - Held that - The ratio of the decision of Supreme Court in case of CIT Vs. Reliance Petro Products Pvt. Ltd.(2010 (3) TMI 80 - SUPREME COURT) is squarely applicable to the facts and circumstances of the present case as assessee has not furnished any inaccurate particulars. She filed certificate for donation of the property to the Trust which is registered u/s 80G. However, the claim was denied because of the reason that deduction u/s 80G is not allowable on fixed assets. This was a bonafide mistake and nothing else. If wrong claim was to be made then assessee could have claimed in the original return. Therefore, penalty levied was not justified Decided in favor of assessee.

Summary

Issues:
Levy of penalty under section 271(1)(c) of the Income-tax Act, 1961 for assessment year 2006-07 based on inaccurate particulars of income furnished by the assessee.

Analysis:
The case involved an appeal by the assessee against the order of the ld. CIT (A)-II, Jaipur, sustaining the penalty of Rs.43,359/- under section 271(1)(c) of the Income-tax Act, 1961. The assessee had initially filed a return of income declaring Rs.3,20,028/-, later revising it to claim a deduction under section 80G for a property gifted to a Trust. The assessing officer (AO) disallowed the deduction, leading to the initiation of penalty proceedings. The AO and the ld. CIT(A) upheld the penalty, citing inaccurate particulars of income furnished by the assessee. The Tribunal noted that the assessee, a Professor of Hindi, revised the return based on advice from colleagues regarding the entitlement to deduction under section 80G for gifts to a Trust. The Tribunal found that the assessee acted bonafide in revising the return without legal assistance, indicating a lack of awareness regarding the legal provisions. The Tribunal emphasized that the assessee submitted a gift certificate from the Trust along with the revised return, demonstrating the claim's legitimacy. Citing the Hon'ble Supreme Court's decision in CIT Vs. Reliance Petro Products Pvt. Ltd., the Tribunal concluded that the assessee's actions did not amount to furnishing inaccurate particulars of income. The Tribunal held that the penalty levied by the lower authorities was unjustified and canceled it, allowing the assessee's appeal.

In conclusion, the Tribunal's decision revolved around the bonafide nature of the assessee's actions in revising the return to claim a deduction under section 80G, emphasizing the lack of inaccurate particulars furnished. The Tribunal's analysis highlighted the importance of the genuineness of the claim and the absence of deliberate misrepresentation in determining the justification for the penalty under section 271(1)(c) of the Income-tax Act, 1961.