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TMI Blog2016 (8) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gains, penalty under s. 271(l)(c) could not be levied on the basis that the AO has assessed the said income as business income and not as capital gains. The Hon’ble Apex Court in the matter of CIT Vs Reliance Petroproducts Pvt. Ltd [2010 (3) TMI 80 - SUPREME COURT ] held that where no information given in the return is found to be incorrect 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. A mere making of claim, which is not sustainable in law, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal is preferred against action of the Commissioner of Income Tax (Appeals)-X, New Delhi in upholding penalty levied by the Assessing Officer under section 271(1 )(c). Briefly stated, facts of the case are that primary business of the assessee company was to manufacture black white picture tubes for the televisions. As the market for black white televisions declined sharply, the assessee was forced to shut down the manufacture of black and white picture tubes in financial year 2005-06. During the Financial Year 2007-08, in order to continue in the business, the assessee company decided to set up another project for manufacture of metal parts for which the company purchased some machinery to the tune of ₹ 3.34 crores. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for filing a reply but the AO proceeded to pass the penalty order without affording further time to the assessee and imposed a penalty of ₹ 1,02,53,238/- for making a wrong claim in the return of income. 6. Aggrieved, the assessee approached the First Appellate Authority who confirmed the penalty by holding that on the facts of the case it was clear that the claim was made by the assessee with an intention to reduce tax incidence. 7. Now, the assessee has approached the Tribunal and assailed the confirmation of penalty in the impugned order. The Ld AR drew our attention to page 38 of the paper book containing a copy of Schedule 9 Other Expenses of the audited financial statements and pointed out that the write off of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be upheld. 9. We have heard the rival submissions and perused the material on record.We find that section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. It is also trite law that penalty proceedings are distinct and different from assessment proceedings. Finding in the assessment proceedings are not conclusive. The entire material available should be considered afresh by the Assessing Officer before imposing penalty u/s. 271(1)(c). In this regard, we note that assessee has duly disclosed the fact of write off of capital work in progress in the audited financial statements by way of a note and hence, there cannot be any allegation of furnishing of inaccurate particulars. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The Hon ble Apex Court in the matter of CIT Vs Reliance Petroproducts Pvt. Ltd [322 ITR 158] held that where no information given in the return is found to be incorrect 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. A mere making ..... X X X X Extracts X X X X X X X X Extracts X X X X
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