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TMI Blog2020 (3) TMI 1168X X X X Extracts X X X X X X X X Extracts X X X X ..... ISSIONER OF INCOME-TAX, KOLKATA - I [ 2012 (9) TMI 775 - SUPREME COURT] - we hold that the assessee has not furnished any inaccurate particular of income deliberately. Accordingly he cannot be visited with the penalty under section 271(1)(c) of the Act, in the given facts and circumstances. Disallowance of the exhibition expenses under the provisions of section 40(a)(i) r.w.s. 195 - We note that claim of the assessee was not doubted by the authorities below. As such, the assessee has incurred expenses for the purpose of the business but the same was disallowed by virtue of the provisions of section 40(a)(i) r.w.s. 195 - Accordingly the same was deemed as income of the assessee by the operation of law. But the controversy arises whether the assessee has furnished inaccurate particular of income by claiming the deduction on account of exhibition expenses which was disallowed on account of nondeduction of TDS under section 195 - term inaccurate particular has not been defined under the Act. However various court including the Hon ble Apex court defined the term as the details of claim made are not accurate, not according to the truth, not exact or erroneous. See RELIANCE PETROPR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d company and engaged in the business of trading of printing machine. The assessment was framed under section 143(3) of the Act after making the disallowance/addition on account of gratuity expenses and exhibition expenses for ₹ 1,33,781/- and ₹ 3,48,640/- respectively vide order dated 29th Dec, 2014. The AO accordingly in the assessment order initiated the penalty proceedings on account of furnishing inaccurate particulars of income. 3.1 However, the assessee during the penalty proceedings claimed that the expenses claimed by it are genuine but the same has been disallowed on account of difference in the view for allowing such claim. As such, the expenses claimed by the assessee were treated as income under the deeming provisions. Therefore, there cannot be any penalty on the disallowance of the claim made by the assessee. However, the AO was of the view that the expenses claimed by the assessee are not allowable by the operations of the provisions of the Act. Had there not been any scrutiny assessment, the assessee would have been allowed the expenses as discussed above which would have resulted the under assessment of income. Accordingly, the AO levied th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty- Held, yes The Hon'ble Delhi Court in above case has also considered the decision of Hon ble Supreme Court in the case of Reliance Petro products (P) Limited and held as under: 18. In the case of Reliance Petro products (P.) Ltd. (supra), the addition made by the Assessing Officer in respect of the interest claimed as a deduction under section 36(1 )(ill) of the Act was deleted by the Commissioner of Income-tax (Appeals) though it was later restored, by the Tribunal, to the Assessing Officer. The appeal filed by the assessee against the order of the Tribunal was admitted by the High Court, it was, in these circumstances, that the Tribunal came to the conclusion that the assessee had neither concealed the Income nor filed inaccurate particulars thereof. In recording this finding, the Tribunal felt that if two views of the claim of the assessee were possible, the explanation offered by it could not he said to be false. This, however, is not the factual position in the case before us. The facts of the present case thus are clearly distinguishable. 19. It is true that mere submitting a claim which is incorrect in law would not amount to giving inaccura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me till the learned CIT-A. However, it is transpired that there was the disclosure made by the tax auditor in the tax audit report furnished in form 3 CD. Thus it cannot be that the assessee deliberately furnished inaccurate particulars of income. Similarly, the AO got information about the disallowance of the provision for gratuity from the tax audit report only. The AO has not carried out any investigation for detecting the claim of the assessee towards the provision for gratuity which was not allowable as deduction. In holding so, we find support and guidance from the judgment of Hon ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd. vs CIT reported in 25 taxmann.com 400 wherein, it was held as under: The contents of the Tax Audit Report suggest that there is no question of the assessee concealing its income. There is also no question of the assessee furnishing any inaccurate particulars. It appears that all that has happened in the present case is that through a bona fide and inadvertent error, the assessee while submitting its return, failed to add the provision for gratuity to its total income. This can only be described as a human error which we are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity would arise. [Para 8] The word 'particulars' must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. In the instant case, there was 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 section 271(1)(c). A mere making of the claim, which is not sustainable in law by itself will not amount to furnishing of inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to the inaccurate particulars. [Para 9] 7.3 However in the present case the genuineness of expenses claimed was not found as incorrect by the authority. Therefore in the present facts and circumstances the assessee should not be visited with penalty merely on the basis of claim made by the assessee is not maintainable in the view of Revenue unless and until the genuineness of expenses claimed found to be incorrect or erroneous. Moreover, it is not like this that the assessee shall never be allowed deduction for the exhibition expenses. As su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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