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TMI Blog2017 (5) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... in the matter of penalty imposed u/s.271 (1)(c) of the IT Act. 2. Rival contentions have been heard and record perused. 3. Penalty imposed u/s.271(1)(c) with respect to income from inbound consignment, was deleted by CIT(A) after having the following observation:- 7'.1 I have gone through the penalty order passed by the AO and also the submissions made by the Appellant before me. 7.2 The Assessment order was passed on 3l.0l.200l. A Perusal of the assessment order reveals that the A.O. had considered the note below the computation of income and investigated. However, there is no allegation or observation of the A.O. in the assessment order that any fact material to the computation of income was either not disclosed or was found to be wrong. The assessment has been made on the basis of facts disclosed by the appellant in the return of income and also during the course of assessment proceedings as and when demanded by the A.O. Assessment has been made by the A.O having different opinion from the point of view of the appellant. Penalty order dated 23.3.2007 has been passed by the A.O. A perusal of the penalty order reveals that the A.O. has nowhere observed that eith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. It only has a persuasive value. The A.O. has referred to the decision of Hon'ble Kerala High Court in the case of P.K. Narayanan, 238 ITR 905 wherein it is held that a resumption arises of concealment of income, if any addition made by the A.O. is sustained by the appellate authority. This is correct but the presumption is rebutable. Any finding recorded in the assessment order does not mean that the penalty 'has to be imposed automatically. Explanation 1 to sec.271(1) (c) provides that the penalty would be deemed to attract where in respect of a fact material to the computation of income either no explanation is offered. or explanation offered is found to be false. Appellant has offered explanation which was not found to be false and accordingly its case is not covered by Clause .(A) of Explanation 1. Clause (B) of Explanation 1 provides that where the assessee is not able to substantiate its explanation and fails to prove that such explanation is bonafide and all the {acts relating to the same have been disclosed. I find that the appellant had made disclosure first in the computation of income. Thereafter during assessment proceedings copies of agreements, judicial rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been disclosed by itself, even if it takes out the case from the purview of non -disclosure, it cannot by itself take out the case from the purview of furnishing inaccurate particulars. Mere omission from the return of an item of receipt does neither amount to concealment nor deliberate furnishing of inaccurate particulars o fincome unless and until there is some evidence to show or some circumstances found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. In order that a penalty under section 271(1){iii) may be imposed, it has to be proved that the assessee has consciously made the concealment or furnished inaccurate particulars of his income': 7.6. The Hon'ble ITAT Mumbai Bench in the case of Roborant Investments (P) Ltd. 7 SOT 181 has held that the cases involving genuine difference of opinion on matters of law between the assessee and the AO are clearly outside the scope of Explanation 1 to Sec. 271(1)(c). The Hon'ble Supreme Court in the case of K.C. Builders, 265 ITR 562 (SC), has held that mere omission from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se assessee had claimed dividend income as part of business income and had. therefore claimed that it was to be included in the profit for purpose of Sec.80HHC. The A.O. disallowed the claim and imposed penalty. The Tribunal found that all the facts were disclosed and only the claim was made under erroneous claim which could not be justified in law. The Hon'ble Delhi High Court had that when there was full disclosure of material it could not be said that the conduct of assessee attracted provisions of sec.271(1)(c). Penalty was held unjustified. The Hon'ble Delhi High Court has discussed the case of CIT vs. Vidyagauri Natvarlal 238 ITR 91 (Guj) and has held as under: What is required to be considered is whether there was any enquiry that was required to be made by the Assessing Officer before concluding that the assessee had furnished inaccurate or false particulars. In this case we are of the view that no such enquiry was required to be made but there was only the need for application of the law. On the legal position, the Assessing Officer was not satisfied and did not agree with the assessee but that by itself is not a ground to invoke the penalty provision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r appeal before us. 5. Learned AR placed on record the order of the Tribunal in assessee s own case for the A.Y.2000-01 to 2006-07, wherein under similar facts and circumstances vide order dated 08/05/2015, the Tribunal have confirmed the action of CIT(A) for deleting the penalty. He also placed on record the order of the Tribunal in assessee s own case for the A.Y.1989-90 1990-91 dated 25/06/2010 wherein similar penalty so imposed was deleted by the Tribunal. 6. Learned AR also placed on record the order of the Bombay High Court dated 06/07/2011 wherein appeal filed by Revenue against the order of the Tribunal was dismissed by the High Court. 7. We have carefully gone through the orders of the authorities below as well as the order of the Tribunal dated 08/05/2015 wherein similar penalty imposed was deleted by CIT(A) and the order of CIT(A) was confirmed by the Tribunal after having the following observation:- 7. We have considered rival contentions and carefully perused the record. We have also gone through the order of the Tribunal in assessee's own case for the assessment years 1989-90 1990-91. The relevant observation of the Tribunal in this regard are as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er s. 271(1)(c) must exist before the penalty is imposed. 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. - CIT vs. Atul Mohan Bindal (2009) 225 CTR (SC) 248 : 28 DTR (SC) 1 : (2009) 9 SSC 589 followed. (Paras 7 8) Reading the words inaccurate and particulars 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. In this case, there I 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). 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 amount to the inaccurate particulars. The assessee had furnished all the details of its expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the finding of fact recorded by the Tribunal, we see no merit in the appeal. Accordingly, the appeal is dismissed. No order as to costs. We also found from the order of the CIT(A) that the assessment has been made on the basis of difference of opinion regarding the interpretation of law on the question of PE, existence of agency PE, royalty and FTS. There is no concealment of any fact nor have any additional facts been discovered proving the earlier disclosure in the return to be false or wrong. The findings recorded by the CIT(A) are just and proper and after consideration of various judicial pronouncements. Respectfully following the order of the Tribunal in assessee's own case, which has been upheld by the Hon'ble Bombay High Court as well as the judgment of the Hon'ble Supreme Court in the case of Reliance Petroproducts Ltd. (supra), we see no reason to interfere in the findings of the CIT(A) deleting the penalty so levied by the AO. 8. As the facts and circumstances during the year under consideration are same, respectfully following the order of the Tribunal in assessee s own case, we do not find any infirmity in the order of CIT(A) for deleting t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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