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TMI Blog2013 (10) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... urate particulars - Following decision of CIT vs. Reliance Petro Products Ltd. [2010 (3) TMI 19 - SUPREME COURT] – Decision in favor of assessee. - ITA No. 3707/Del/2012 - - - Dated:- 11-10-2013 - Shri Shamim Yahya And Shri C. M. Garg,JJ. For the Petitioner : Sh. Hiren Mehta, CA For the Respondent : Mrs. Renuka Jain Gupta, Sr. D. R. ORDER Per Shamim Yahya: AM. This appeal by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-IX, New Delhi dated 09.3.2012 pertaining to assessment year 1999-2000. 2. The grounds raised read as under:- i) That on the facts and circumstances of the case the order passed by the LD. CIT(A) is bad in law. ii) That on the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The contention of the assessee was rejected and the Assessing Officer held that income from sub-lease of property was taxable under the head other sources. Assessing Officer also held that the expenses to the extent of Rs. 520422/- did not relate to income from sub-lease. In view of the above, the taxable income of the assessee was recomputed under the head other sources at Rs. 11,56,250/-. On this amount penalty u/s. 271(1)(c) was also levied. Assessing Officer held that in view of the above said facts, he held that the assessee has furnished inaccurate particulars of its income / concealed the true particulars of its income to the extent of Rs. 5,00,612/-. Accordingly, penalty amounting to Rs. 1,75,214/- was levied. 4. Upon assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n hotel or to do related activities but not to sublease the property. Assessing Officer held that assessee has furnished inaccurate particulars of his income/concealed the true particulars of his income and accordingly, penalty has been levied in this case. Ld. CIT(A) also has confirmed the Assessing Officer's action. 6.1 We find that section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. In this case, we find that assessee's Memorandum of Association contains the following as its main objects:- "i) To source, operate, procure grant of franchise to hotels, tourist resorts, inns, lodging houses, catering, establishment and restaurants. ii) To operate, manage and own hotels ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has disclosed all the facts in the return of income. There was no concealment. Assessee has also furnished all the particulars. In these circumstances, we find that assessee cannot be visited with the rigors of penalty u/s. 271(1)(c). The Assessing Officer has further disallowed expenses to the extent of Rs. 520422/- and held that the above expenses cannot be allowed u/s. 57 of the I.T. Act. We find that it is not the case that any expense was not declared or there was any bogus expenditure. Assessing Officer was of the opinion that expenses cannot said to have been expended to earn rental income by the assessee. In our considered opinion, the above cannot be reason to visit with rigor of penalty u/s. 271(1)(c). 6.3 In this regard, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act, or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute." 6.5 Furthermore, another plank of Ld. Counsel of the assessee's arguments in this regard is that Assessing Officer or the Ld. CIT(A) has not given a positive finding as to whether there was concealment of income by the assessee or whether any inaccurate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Commissioners (Appeals) showed that no clear cut finding had been reached. The Tribunal had failed to appreciate that legal issue. Applying the ratio to the facts of the case, it was apparent that the order of penalty could not be sustained and the tribunal could not have sustained the same. The Tribunal having failed to take into consideration and deal with the decision of the Jurisdictional High Court, it would constitute an error in law which went to the very basis of the controversy involved, and, hence, the impugned order of the Tribunal could not be upheld. (Para 12)" From the above, we find that it is incumbent upon the revenue authorities to give a positive finding as to whether there was concealment of income by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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