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TMI Blog2016 (9) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... tantiated. The penalty u/s 271(1)(c) should have been deleted. 3. The appellant contends that it has provided bonafide explanation and all the facts relating to the claim made in the computation of income has been disclosed during the course of assessment proceedings. Therefore, no penalty u/s 271(1)(c) should be levied. The same should be deleted. 4. The appellant further contends that the Managing Director of the Company is presently non-resident and has mainly relied upon the advice of the professionals. Therefore, the assessee cannot be penalized for action taken based on such professional advice. 5. The appellant reserves the right to add, amend, alter or forgo any of the grounds at 2. The facts in brief of the case are that the assessee company was engaged in manufacturing of duplicating machine and ink. For the year under consideration, the assessee filed return of income on 28/03/2007 declaring income of Rs. 2,17,594/- which was processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act'). The case was selected for scrutiny and notice under section 143(2) of the Act was issued and assessment proceedings were completed u/s. 143(3) of the Act on 29/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income-tax (Appeals) and no further appeal was filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals). Thereafter, the Assessing Officer levied penalty under section 271(1)(C) of the Act on 16/11/2009 holding that there was deliberate attempt on the part of the assessee to conceal its income or furnish inaccurate particulars of its income. The learned Commissioner of Income-tax (Appeals) upheld the penalty levied by the Assessing Officer. Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above. 3. Before us, the learned counsel of the assessee addressing the grounds of appeal, submitted that penalty levied was wrong and bad in law as the assessee had completely disclosed the particulars of income and filed explanation to prove its bonafide. He further submitted that in the computation of income, which is available at page 3 of the paper book, the assessee disclosed the nature of income received and also the fact that amount would be utilized for the purchase of industrial land in specified areas. He further referred to page 12 of the paper book, which is a schedule of the audited accounts st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel invited our attention to the decision of the Tribunal Ahmedabad bench in the case of Aspi Ginwala, Shriram engineering and Manufacturing industries versus ACIT, circle - 5, Baroda (2012) 52 SOT 16(Ahm.), wherein the assessee made investment in the Bonds beyond the period of six months time limit prescribed under section 54EC as the Bonds were not available in the market before the date, in such circumstances, the Tribunal relying on the circular of the CBDT held that the assessee was prevented by sufficient cause, which was beyond his control in making investment in Bonds specified under section 54EC of the Act within the time prescribed and therefore the assessee was entitled for exemption under section 54 EC of the Act. 4. The learned counsel also relied on the Hon'ble Supreme Court decision in the case of CIT Vs. Reliance Petroproducts Ltd. (2010) 322 ITR 158 (SC). Further, the learned counsel submitted that assessee had offered explanation which is not found by the Assessing Officer or by learned Commissioner of Income Tax (Appeals) to be false and the assessee offered its explanation to prove its bonafide and therefore the case of the assessee is not covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the computation of income, which is available at page-3 of the assessee's paper book, and which has also been referred by the Assessing Officer in the assessment order, the assessee has clearly mentioned the fact of compensation received against tenancy rights under the head income from capital gains and also mentioned the fact that as why the assessee was making a claim for exemption from the capital gains tax. The facts in respect of exemption sought from capital gains tax were also disclosed by the assessee in the notes to account, which are available at page 12 of the assessee's paper book. The relevant part of the notes to account is reproduced as under: "8. Compensation received against tenancy right under compulsory acquisition of factory area at 2A DLF Industrial Area, Delhi by LAC for Delhi Metro Rail Corporation (DMRC) will be utilized for the purpose as specified by the Income-tax Act, 1961 within due course. Hence, no provision for tax has been provided for on the capital gain." 9. The learned counsel of the assessee has submitted before us that the assessee was under bona fides impression that the assessee would be allotted industrial land and amount of compensa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We have heard the rival submissions and consider them carefully. After taking into consideration all the facts and material on record, we find that the assessee deserves to succeed in this ground also. There is no dispute that assessee has sold its capital asset i.e. plant and machinery during the year under consideration. For claiming exemption u/s 54EC, upto Rs. 50 lac has to be invested in the purchase of specified bonds. The assessee approached the concerned authorities. However, the bonds were not available. Various entities approached CBDT. Taking into consideration the hardship faced by the various entities, the CBDT vide circular no. 142/9/2006 TPL dated 30.6.2006 extended the time for purchasing the specified bonds upto 31.12.2006. The assessee approached the appropriate authorities to buy the bonds; however they were not available. Therefore, it was an impossible task for the assessee to comply with the conditions of the sec. 54EC. The assessee ultimately purchased FDs of Rs. 50 lacs with a view to buy specified bonds whenever they are available. Letter was issued to the SBI while purchasing FDs of Rs. 50 lacs that the bonds are not available in the market and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products Ltd (supra), while dealing the word "particular" held that: 9. We are not concerned in the present case with the mens rea. However, we have to only see as to whether in this case, as a matter of fact, the assessee has given inaccurate particulars. In Webster's Dictionary, the word "inaccurate" has been defined as : "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript." We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under s. 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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