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TMI Blog2016 (9) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in CIT vs. Reliance Petroproducts Pvt. Ltd. (2010 (3) TMI 80 - SUPREME COURT )has authoritatively laid down that making of a claim by the assessee which is not sustainable will not tantamount to furnishing inaccurate particulars - Decided in favour of assessee - ITA Nos.-5280 & 5281/Del/2013 - - - Dated:- 28-7-2016 - SHRI G.D. AGRAWAL, HON BLE VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Assessee : Sh. P.S. Kashyap, CA For The Revenue : Sh. Sarabjeet Singh, DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER: Both these appeals have been preferred by the assessee against the order confirming the penalty u/s 271(1) (c) of the Income Tax Act, 1961. ITA No. 5280 pertains to AY 2002-03 ITA No. 5281 pertains to AY 2003-04. Both these appeals emanate from the common order dated 13/06/2013 passed by the Ld. CIT (A)-Meerut. 2. The facts of the case are that during the AY 2002-03 the assessee had received gifts amounting to ₹ 16 lakhs from three persons, whereas in AY 2003-04 the assessee had received gifts amounting to ₹ 10 lakhs from two persons. The assessee had filed affidavits, gift deeds, copies of ITRs, copie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee and in view of the decision of the Hon ble Apex Court in CIT vs. Reliance Petro Products Pvt. Ltd., 322 ITR 158 (SC) that mere making of a claim which is not sustainable in law by itself will not amount to furnish all inaccurate particulars, the penalty levied u/s 271(1) (c) was patently wrong and liable to be deleted. 4. The Ld. DR submitted that the persons who are alleged to have gifted the amounts were having meager source of income and that the AO had made independent enquiries u/s 133(6) of the Income Tax Act and had thereafter reached the conclusion that these gifts were not genuine and hence it was a fit case for the imposition of penalty u/s 271(1) (c) of the Act. It was also submitted that the Income Tax Returns of the donors were not accompanied by balance sheets and the Wealth Tax Returns were also not accompanied by the computation of net wealth and, therefore, the credit worthiness of the donors could not established. The ld. DR strongly supported the orders of the authorities below and submitted that the penalties imposed should be confirmed. 5. We have heard the rival submissions and perused the material on record. The Hon ble Supreme Court, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced by the assessee in the course of the penalty proceedings, it is all the more necessary that such further material should also be examined in an attempt to ascertain whether the assessee concealed his income or furnished inaccurate particulars. Thus, under penalty proceedings assessee can discharge his burden by relying on the same material on the basis of which assessment is made by contending that all necessary disclosures were made and that on the basis of material disclosed there cannot be a case of concealment of income or furnishing inaccurate particulars of income. Further if there is any material or additional evidence which was not produced during assessment proceedings same can be produced in penalty proceedings as both assessment and penalty proceedings are distinct and separate. In CIT vs. M/s Sidhartha Enterprises (2009) 184 Taxman 460 (P H)(HC) it was held that the judgment in Dharmendra Textile cannot be read as laying down that in every case where particulars of income are inaccurate, penalty must follow. Even so, the concept of penalty has not undergone change by virtue of the said judgment. Penalty is imposed only when there is some element of deliberate de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. Therefore, it is obvious that it must be shown that the conditions under section 271(1)( c ) must exist before the penalty is imposed. The court further observed that there can be no dispute that everything would depend upon the return filed because that is the only document, where the assessee can furnish the particulars of his income. 7. Reverting to the facts of the present case, the Assessing Officer, in the penalty orders, has observed that the assesseee had concealed the income and has furnished inaccurate particulars. However, the penalty orders are woefully silent on the issue as to how this satisfaction of concealment/furnishing of inaccurate particulars was arrived at. The Ld. CIT (A) has relied on the principle of preponderance of probability while confirming the penalties. The Ld. CIT (A) has held that since the assessee had received a sum of ₹ 26.00 lacs as gifts from 5 parties in a span of two years with whom the assessee had only family relation and that since there was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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