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TMI Blog2017 (4) TMI 1446X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Yadav appeared on behalf of the Department whereas none appeared on behalf of the respondent-assessee inspite of issuance of notice by Registered A.D. No application seeking adjournment has also been made on behalf of the respondent-assessee. In this view of the matter, following Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, the appeal is being disposed of ex parte qua the respondent-assessee after hearing the ld. DR on merits. 3. The only issue in this appeal arises from the action of CIT(A) in deleting the penalty of Rs. 14,34,660/- imposed by the Assessing Officer u/s 271(1)(c) of the Act. Briefly put, the relevant facts are that the respondent-assessee is a HUF who filed a return of income for Assessment Year 2007- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute." 5.2 In the decision rendered in the case of CIT vs Atul Mohan Bindal reported at 317 ITR 1 (S.C.), the Apex Court once again held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The words are plain and simple. In order to expose the assessee to the penalty, unless the case is strictly 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 sec.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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure under section 40(a)(ia), that itself cannot be construed as furnishing inaccurate particulars of income or concealment of income. The assessee has failed to deduct TDS which resulted in disallowance of expenditure. In our opinion, the mistake committed by the assessee was compensated by disallowing the expenditure. Further, the revenue cannot penalize the assessee by levying penalty under section 271(1)(c) of the Act. In order to levy penalty under section 271 (1) (c) of the Act, there has to be concealment of particulars of income of the assessee or the assessee must have furnished inaccurate particulars of its income. Present is not the case of concealment of income or it is not the case of revenue that the assessee has furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant. The particulars of all the payments were reflected in the return filed by the appellant. The totaling error by which the amount of interest paid was taken as Rs. 47,62,630/- as against the actual amount of Rs. 42,62,630/- stood reconciled before the CIT(A) during the appellate proceedings pertaining to the quantum appeal. The disallowance of Rs. 42,62,630/- has been sustained since the appellant did not deduct TDS as stipulated in section 194A of the Act. Thus the appellant has not complied with legal requirements but the details of payment of interest have been duly reflected in the return filed. In such a situation it cannot be said that the particulars furnished by the appellant were inaccurate. The making of an erroneous claim, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the ld. DR and the orders passed by the lower authorities. In our opinion, the CIT(A) made no mistake in deleting the penalty inasmuch as she has recorded a categorical finding that there was no concealment or furnishing of inaccurate particulars of income though the claim for deduction of expenditure of interest was otherwise found disallowable. According to the CIT(A), no particulars regarding the claim furnished by the assessee were found to be inaccurate or erroneous. According to the CIT(A), it is merely a case where the claim made by the assessee has been denied, and that too, on the basis of non-compliance with Sec. 40(a)(ia) of the Act, which was only a technical default by the assessee. The discussion made by the CIT(A) clearly b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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