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TMI Blog2005 (12) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer or appellate authorities would take on the legal claim made by the assessee. Cases involving genuine difference of opinion on matters of law between the assessee and the Assessing Officer are clearly outside the scope of Explanation 1 to section 271(1) provided the assessee has made full disclosure of all the relevant facts and also acted bona fide . Tested on the aforesaid parameters, we feel that the learned CIT(A) has correctly cancelled the impugned penalty. His order is, therefore, confirmed. Appeal filed by the Department is dismissed. - K.C. SINGHAL AND D.K. SRIVASTAVA, JJ. Keshav Saxena for the Appellant. Nitesh S. Joshi for the Respondent. ORDER D.K. Srivastava, A.M. - The appeal filed by the Department is directed agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part to offer the service charges/rental income for tax under the head "Income from House Property". 4. On appeal against the said penalty order, the learned CIT(A) cancelled the penalty with the observations that taxability of income under the head "Income from House Property" or "Income from business" was a debatable issue. The Department is aggrieved by the aforesaid order of the learned CIT(A) and is now in appeal before the Tribunal. 5. In support of appeal, the learned DR submitted that the rental income was offered by the assessee under the head "Income from business" as against which the Assessing Officer taxed it under the head "Income from House Property". According to him, the assessee had accepted the taxability of rental incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Property" or "Income from business" was a question of law. 7. We have heard the parties and considered their submissions. The short question in this appeal is whether penalty can be levied on the basis of mere difference of opinion on matters of law regardless of the fact that an assessee has made full disclosure of all the facts material to the computation of income in the return of income and the statements accompanying the return and also acted bona fide in doing so. As rightly observed by the learned CIT(A) in his order, there is no allegation in the present case that the assessee has concealed any material particular of its income. It is also not the case of the Assessing Officer that rental income was not shown by the assessee. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome as a result thereof is deemed to represent the income in respect of which particulars have been concealed. In the case before us, the assessee did offer an explanation before the Assessing Officer and it is not the case of the Assessing Officer that the explanation so offered by the assessee was false. The case of the assessee, therefore, does not fall under clause (A). As regards the applicability of clause (B), we find that the assessee before us had disclosed all the facts relating to the computation of its total income before the Assessing Officer. It was a debatable issue as to whether the rental income/service charge was assessable as income from business or income from house property. The assessee, instead of giving up its clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee aware that the provisions thereof are to be used against him. These provisions include the Explanation . By reason of the Explanation , where the total income returned by the assessee is less than 80 per cent of the total income assessed under section 143 or 144 or 147, reduced to the extent therein provided, the assessee is deemed to have concealed the particulars of his income of furnished inaccurate particulars thereof, unless he proves that the failure to return the correct income did not arise from any fraud or neglect on his part . The assessee is, therefore, by virtue of the notice under section 271 put to notice that if he does not prove, in the circumstances stated in the Explanation , that his failure to return his cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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