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TMI Blog2012 (10) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... he explanation was bona fide and all facts relating to the same had been disclosed. Since neither Part-A nor Part-B of Explanation was found to be applicable, in our considered opinion penalty u/s 271(1)(c) is not imposable - Decided in favor of assessee - I.T. A. No. 4425/Del/2010 - - - Dated:- 18-7-2012 - SHRI U.B.S. BEDI, AND SHRI K.D. RANJAN, JJ. Appellant by : Ms. Srujani Mohanty, DR. O R D E R PER K.D. RANJAN, ACCOUNTAT MEMBER: This appeal by the Revenue for Assessment Year 2005-06 arises out of the order of the Commissioner of Income-tax (Appeals)-VII, New Delhi. The effective grounds of appeal raised by the Revenue are reproduced as under:- 1. The order of the learned CIT(Appeals) is erroneous contrary to fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng inaccurate particulars. This contention of the assessee was rejected by the Assessing Officer on the ground that the onus was on the assessee to establish that failure to return correct income did not arise from any fraud or any gross or willful neglect on his part. The Assessing Officer observed that the assessee had furnished inaccurate particulars of his income and failed to offer any explanation or evidence. Therefore, the assessee was guilty of concealing its particulars of income and furnishing inaccurate particulars of income amounting to Rs.24,01,550/-. The AO imposed penalty of Rs.8,78,788/- being 100% of amount of tax sought to be evaded. 4. On appeal it was submitted by the assessee that all details of expenditure were f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon ble Punjab Haryana High Court in the case of CIT Vs. Ajaib Singh Co., 253 ITR 630 wherein it has been observed that merely because certain expenses claimed by the assessee were disallowed by the authority, it would not mean that the particulars furnished by the assessee were wrong. It was held that mere disallowance of expenses per se cannot mean that the assessee had furnished inaccurate particulars of his income. The learned CIT(A) also placed reliance on the decision of Hon ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. (supra) wherein the meaning of word inaccurate has been explained. The learned CIT(A) concluded that mere disallowance or addition will not be sufficient to levy penalty u/s 271(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, nor according to the truth or erroneous. Where there is no fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation and was able to prove that the explanation was bona fide and all facts relating to the same had been disclosed. Since neither Part-A nor Part-B of Explanation was found to be applicable, in our considered opinion penalty under sec. 271(1)(c) is not imposable. Accordingly the learned CIT(A) has rightly deleted the penalty relying on the decision of Hon ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. (supra) and on the decision of Punjab Haryana High Court in the case of Ajaib Singh Co. (supra). Hence, we do not find any infirmity in the order of the CIT(A) deleting the penalty imposed under sec. 271(1)(c ) of the Act. 8. In the result, the appeal filed by the Revenue is dismissed. 9. This decision is pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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