2012 (11) TMI 141 - AT - Income Tax

Delay in filing appeal - refusal of condonation of delay - Held that - As decided in Mahaveerprasad Jain Versus CIT 1988 (1) TMI 21 - MADHYA PRADESH HIGH COURT where an applicant engages a counsel, he would be justified in presuming that the counsel would attend to the case. The applicant cannot be made to suffer for the negligence of the counsel. An appeal cannot be dismissed because the counsel failed to appear when the case was posted for hearing - the delay is hereby condoned - in favour of assessee. Penalty u/s 271(1)(c) - Disallowance of foreign traveling expenses - Held that - Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars - As it is not the case of the Revenue that the claim made by the assessee was found to be false or untrue based on no material or bonafide belief, we are of the view that there is no concealment on the part of the assessee which may call for levy of penalty u/s 271(1)(c) - in favour of assessee.

Summary

Issues:
1. Delay in filing appeal and refusal of condonation of delay
2. Imposition of penalty under section 271(1)(c) of the Income Tax Act

Analysis:
1. Delay in filing appeal and refusal of condonation of delay:
The appellant's appeal was delayed by 92 days, and the appellant attributed this delay to the negligence of their Chartered Accountant. The Chartered Accountant's affidavit was submitted as evidence. However, the CIT(A) held that the appellant, as the principal, should bear the responsibility to ensure timely filing, regardless of the agent's negligence. The delay was not condoned, and the appeal was dismissed on this ground.

2. Imposition of penalty under section 271(1)(c) of the Income Tax Act:
The AO imposed a penalty under section 271(1)(c) due to the disallowance of foreign traveling expenses and the lack of documentary evidence to support the business relationship of these trips. The CIT(A) upheld the penalty, emphasizing the absence of documentary evidence. However, the ITAT found that the disallowance was based on an estimate and did not amount to furnishing inaccurate particulars of income. Citing legal precedents, the ITAT highlighted that merely making an incorrect claim does not constitute furnishing inaccurate particulars. As there was no finding of incorrect details in the return, the ITAT concluded that there was no concealment warranting the penalty. Consequently, the penalty imposed by the AO and upheld by the CIT(A) was deleted, and the appeal was allowed.

In conclusion, the ITAT allowed the appeal, overturning the penalty imposed under section 271(1)(c) of the Income Tax Act due to the absence of evidence of inaccurate particulars of income. The delay in filing the appeal was not condoned, emphasizing the appellant's responsibility for timely compliance.