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TMI Blog2012 (7) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... hing has been found to be “false” - mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee - decided in favour of assessee. - I.T.A.NO. 7795/Mum/2010 - - - Dated:- 30-5-2012 - SHRI R.S.SYAL, SHRI VIVEK VARMA, JJ. Appellant by : Mr. Vipul B. Joshi Ms. Alpana Redij. Respondent by : Mr. Aatiq Ahmed. O R D E R Per VIVEK VARMA, JM : The appeal is filed by the assessee against the order of CIT(A) XVIII, Mumbai, dated 11-07-2007, wherein the CIT(A) has sustained the levy of penalty u/s 271(1)(c) by the AO at Rs. 3,94,525/-. 2. The facts of the case are that the assessee purchased units of Sundram Bond Saver o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cealed . The CIT(A) further imported the ratio of decision in UOI v/s Dharmendra Textiles Processors 166 Taxman 65 (S.C) and the cases of Vidya Gawri Natverlal 238 ITR 91 (Guj) and Somnath Mills 214 ITR 32 (Guj). He, therefore, sustained the penalty as levied by the AO. Aggrieved by the decision, the assessee is now before the ITAT. 7. Before us, the Authorised Representative briefly narrated the facts of the case, which were submitted before the revenue authorities, both in quantum proceedings and penalty proceedings. The Authorised Representative submitted that the entire basis of levy of penalty is Explanation 1 to section 271(1)(c), i.e. the explanation which is found to be false . . The A.R. submitted that neither the explanation wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 26-12-2004 and 26-03-2005 fall within the period of three months or not, because the Act, under section 94(7)(b)(i) uses the words after such Date , and the revenue authorities have used this expression against the assessee, which even the assessee has not denied. Nowhere in the orders of the revenue authorities do we find any mention that any particular information with regard to the transaction dated 26-12-2004 and 26-03-2005 were either withheld, or wrongly submitted or concealed in any manner by the assessee. The A.R., in his support, has cited the case of Hon'ble Supreme Court in T. Ashok Pai v/s CIT in 292 ITR 11, wherein the Hon ble Supreme Court has explained the word inaccurate and we are in full agreement that there was no de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the matter afresh as the question has to be considered from a different angle . Further in the decision, the Hon ble Supreme Court observes, It is, therefore, trite that if an explanation given by the assessee with regard to the mistake committed by him has been treated to be bona fide and it has been found as of fact that he had acted on the basis of wrong legal advice, the question of his failure to discharge his burden in terms of the Explanation appended to section 271(1)(c) of the Income-tax Act would not arise. The Hon ble Supreme Court further observes : In Dilip N. Shroff v. Joint CIT (civil appeal arising out of SLP (C) No. 26831/2004) delivered today, this court observed : The expression conceal is of great importa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied by the assessee in its return, 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 the 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. Decision of Gujarat High Court affirmed . It may be pointed out that in this case, the Hon'ble Supreme Court has explained the decision taken in Dilip N. Shroff and how it was distinct from the decision in Dharmandra Textiles. In the above decision, the Hon'ble Supreme Court has referred to the decisions taken by the Hon'ble Supreme Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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