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TMI Blog2013 (6) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... nue before the Tribunal cannot be made, as per necessary CBDT Circular in this regard. The penalty in this case has been levied on account of disallowance made in accordance with Rule 8D read with section 14A. There has been no concealment or furnishing of inaccurate particulars by the assessee in this case. The disallowance has been made by computing the sums which were duly disclosed in the return and accounts of the assessee. See Hindustan Steel vs. State of Orissa [1969 (8) TMI 31 - SUPREME Court] & CIT vs. Reliance Petro Products Ltd. [2010 (3) TMI 80 - SUPREME COURT] wherein held that mere submitting a claim which is incorrect in law would not amount to giving inaccurate particulars of the income of the assessee. In favour of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taple against statue. 3. In this case the Assessing Officer observed that the dividend income of the assessee works out to Rs. 11,35,267/- (being exempt u/s. 10(33) of the I.T. Act, 1961. Assessing Officer asked the assessee's counsel that why expenditure being interest debited to P L account be not disallowed in view of provisions of section 14A r.w.r. 8D of the Income Tax Rules, 1962. The assessee contended that he has not claimed the expenditure against exempted income. Assessing Officer was not satisfied. He computed the disallowance as per Rule 8D as under:- "As per Rule 8D of the I.T. Rule, 1962, the amount of expenditure in relation to income not includable in total income is worked out as per sub-rule 2(ii) 2(iii) of the Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Ld. Commissioner of Income Tax (A), it was submitted that the Assessing Officer is not justified to levy the penalty, as there was no concealment of income and furnishing of inaccurate particulars of income. It was submitted that the Assessing Officer has initiated the penalty proceedings only in respect of the addition of Rs. 8,21,690/- u/s. 14A vide para 5 of the order of the Assessing Officer. But the Assessing Officer has levied penalty in respect of the whole addition of Rs. 10,38,677/- which included general additions under the head car and telephone etc. which is not justified. It is submitted that even in respect of disallowance u/s. 14A penalty is not levaible as there is no concealment of income as all the details and all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment and also to avoid litigation and as such the Assessing Officer is not justified to levy the penalty as there is no concealment of income or furnishing of inaccurate particulars of income within the meaning of section 271(1)(c). The case of the assessee is also supported by the case of C.I.T. vs. Reliance Petoproducts Pvt. Ltd. (2010) 322 ITR 158 (SC) in which it has been held that mere making of a claim which is unsustainable law cannot be treated as furnishing of inaccurate particulars of income and as such will not attract the penalty proceedings which is u/s. 271(1)(c). After considering all the facts and circumstances of the case, I am of the view that the Assessing Officer has not detected or found any concealment of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disallowance has been made by computing the sums which were duly disclosed in the return and accounts of the assessee. We find that Section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. Hence, in our considered opinion on the facts and circumstances of this case the assessee's conduct cannot be said to be contumacious so as to warrant levy of penalty. Hence, we hold that there is no infirmity in the order of the Ld. Commissioner of Income Tax (A) and the same deserves to be upheld. 10. While coming to the aforesaid conclusion, we place reliance from the Apex Court decision rendered by a larger Bench comprising of three of their Lordships in the case of Hindustan Steel vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a was a essential requirement of penalty u/s 271(1)(c). The Hon'ble Apex Court also observed that if the contention of the revenue is accepted then in case of every return where the claim is not accepted by the Assessing Officer for any reason, the assessee will invite the penalty u/s 271(1)(c). This is clearly not the intendment of legislature. 12. In the background of the aforesaid discussions and precedents, we do find any infirmity in the order of the Ld. Commissioner of Income Tax (A), accordingly, we uphold the same. 13. The assessee's cross objection is only supporting the order of the Ld. Commissioner of Income Tax (A). Since, we have already upheld the order of the Ld. Commissioner of Income Tax (A) in the Revenue's appeal, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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