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TMI Blog2015 (6) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... 31,41,308/- levied by the AO under section 271(1)(c) of the Income Tax Act, 1961. 2. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 3. The appellant craves leave to add, alter or amend any/ all of the grounds of appeal before or during the course of the hearing of the appeal. 3. The brief facts of the case are during the course of assessment proceedings AO noticed that the assessee has earned a dividend income of Rs. 1,83,157/- which did not form part of the total income. As per the assessee the disallowance u/s. 14A came to Rs. 9,735/-, whereas as per the AO the disallowance under section 14A was to be made as per Rule 8D and thus disallowance of Rs. 92,41,858/- has been made by the AO while completing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he penalty in dispute by thoroughly examining the written statement filed by the asseessee and the order of the lower authorities as well as the various decision rendered by the Hon'ble Supreme Court of India and the Hon'ble High Court of Delhi. 8.1 After going through the submissions filed by the assessee alongwith the case law as well as the orders of the revenue authorities, it is very relevant to go through the relevant provisions of section 271(1)(c), which provides for imposition of penalty where the AO has to be satisfied that:- i) any person had concealed particulars of his income or ii) had furnished inaccurate particulars of such income. Further, after insertion of Explanation 1 to Section 271(1)(c), the onus is on the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence to establish that the assessee had concealed the amount or furnished inaccurate particulars and this onus is to be discharged by the department. (iv) The Assessing officer while considering levy of penalty should consider whether the assessee has been able to discharge his part of the burden. He should not begin with the presumption that the assessee is guilty. (v) Though penalty proceedings under the income-tax law may not be criminal in nature, they are still quasi-criminal requiring the Department to establish that the asessee has concealed his income. (vi) It has to be understood that the Explanation to section 271(l)(c) is an exception to the general rule raising a legal fiction by which the burden which is ordinarily with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (317 ITR1) and UOI Vs Rajasthan Spinning & Weaving Mills (2010) (lGSTR66) (SC), and where they have reiterated again that "that for applicability of Section 271(l)(c} the condition stated therein must exist." 8.8 Even in the decision in the case of (IT (LTU) Vs. MTNL, ITA NO.626/2011 dated 10.10.2011, the Hon'ble Jurisdictional Delhi High Court has upheld the same view. 8.9 We note from the above, it is very clear that for imposing penalty under Section 271(1)(c), the AO have to be satisfied that: (a) assessee has concealed the particulars of income or (b) assessee has furnished inaccurate particulars of such income. 8.10 Thus, in view of the Hon'ble Supreme Court's decision in Reliance Petroproducts (Supra) it is clear that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO that assessee has "concealed" or "furnishing of inaccurate particular" didn't ipso facto warrant penalty under Section 271(1)(c). It is also seen that in the present case that the dividend income earned by the appellant is to the tune of Rs. 1,83,157 and asessee's believe that no direct expenditure is incurred in earning the exempt income, shows that there is a difference of opinion and it is a vexed question of law. 8.14 Keeping in view of the above facts and circumstances of the case, we find considerable force in the finding of the Ld. CIT(A) that in the present case the conditions laid down in Section 271(1)(c) are not being fulfilled, because "inaccurate particulars" means the details filed in the return of income are "not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect or inaccurate, the 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, not according to the truth or erroneous. Where ..... X X X X Extracts X X X X X X X X Extracts X X X X
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