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TMI Blog2021 (8) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... all the details of its deduction u/s 54B in the return of income, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on assessee`s part. It was up to AO to accept assessee`s claim in the Return of Income or not. The assessee was having bona fide belief that he is entitled to claim deduction under section 54B as he was having land at various places. Thus, merely because the assessee had claimed the deduction under section 54B which claim was not accepted or was not acceptable to the revenue, that by itself would not, in our opinion, attract the penalty under section 271(1)(c) of the Act. As conscious of landmark decision in the case of CIT Vs. Reliance Petroproducts [ 2010 (3) TMI 80 - SUPREME COURT] holding that just merely claim of wrong deduction in the return of income does not attract penalty under section 271(1)(c) - Decided in favour of assessee. - ITA No.697 & 698/SRT/2018 - - - Dated:- 27-7-2021 - Shri Pawan Singh, JM And Dr. A. L. Saini, AM For the Assessee : Shri Suresh Kabra - AR For the Respondent : Ms Anupama Singla Sr. DR ORDER PER DR. A. L. SAINI, ACCOUNTANT MEMBER: These ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltural income which was also disallowed and added to the total income of the assessee. 5. Since the assessee withdrew his claim of deduction under section 54B of the Act at ₹ 16,77,758/- and wrongly shown income from sale of milk amounting to ₹ 72,000/-, as his agricultural income, therefore assessing officer initiated the penalty proceedings under section 271(1) (c ) of the Act and imposed penalty of ₹ 3,52,414/- under section 271(1)(c) of the Act. 6. On appeal, ld CIT(A) has confirmed the penalty imposed by the assessing officer, under section 271(1)(c) of the Act. Aggrieved, the assessee is in further appeal before us. 7. Shri Suresh Kabra, Learned Counsel for the assessee, begins by pointing out that assessee has claimed deduction under section 54B of the Act with bona fide belief that he is eligible for such deduction, as he is a farmer and agriculturist and purchased other agricultural land. Although, assessee has purchased other agricultural land, however, he could not make compliance of exemption under section 54B of the Act i.e. he could not demonstrate by purchasing another agricultural land within two years from the sale of first agricultural l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 271(1)(c) of the Act. She contends that assessee has claimed deduction under section 54B of the Act knowingly to cheat the Revenue. She stated that case law relied on by the Learned Counsel in case of CIT Vs. Reliance Petroproducts, 322 ITR 158 (SC) is not applicable to the assessee s case under consideration. She pointed out that case law of Reliance Petroproducts (supra) relates to Section 14A disallowance which was wrongly claimed by the assessee in the return of income and therefore the case law cited by the Learned Counsel is no way defend the case of the assessee. She stated that intention of the assessee was to claim wrong claim in the return of income to defraud the Revenue, therefore, the case law cited by the Learned Counsel is not applicable in the instant case. 9. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. At the cost of repetition, we reiterate the facts of the assessee`s case. In this case the assessing offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stage, the assessing officer issued a notice under section 142(1) of the Act, dated 01/08/2016, to furnish various details, documents and explanations to establish genuineness of agricultural activities by the assessee and details of the land that was sold and the land that was purchased. In response to the show cause notice of the Assessing Officer, the assessee, vide letter dated 16.12.2106 offered to withdraw his claim of deduction under section 54B of the Act. The submission made by the assessee, before the assessing officer, is reproduced below: While filing of ROI on 14.03.2015, deduction u/s 54B of the Act claimed of ₹ 16,77,758/- against the sale of agri. Land situated at Vata. During the course of assessment proceedings, sale deed of the same is submitted at page No. 16 mentioned as JUNISHARAT NIKHETINIJAMIN and hence, claimed against the purchase of New Agriculture land. Your honour has requested to produce the evidence regarding agriculture income/activity from the said land prior to sale for two previous years. I am an agriculturist and holding the land at various places accordingly presently, I am not able to produce, from which subject matter agri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty under section 271(1)(c) of the Act. 12. We are very much conscious of Hon'ble Apex Court s landmark decision in the case of CIT Vs. Reliance Petroproducts, 322 ITR 158 (SC), holding that just merely claim of wrong deduction in the return of income does not attract penalty under section 271(1)(c) of the Act. The findings of the Hon'ble Supreme Court is reproduced below: 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amil Nadu General Sales Tax Act, the Court had found that the authorities below had found that there were some incorrect statements made in the Return. However, the said transactions were reflected in the accounts of the assessee. This Court, therefore, observed : So far as the question of penalty is concerned the items which were not included in the turnover were found incorporated in the assessee's account books. Where certain items which are not included in the turnover are disclosed in the dealer's own account books and the assessing authorities include these items in the dealer's turnover disallowing the exemption, penalty cannot be imposed. The penalty levied stands set aside. The situation in the present case is still better as no fault has been found with the particulars submitted by the assessee in its Return. 12. The Tribunal, as well as, the Commissioner of Income-tax (Appeals) and the High Court have correctly reached this conclusion and, therefore, the appeal filed by the revenue has no merits and is dismissed. 14. From the above judgment of the Hon`ble Supreme Court, it is abundantly clear that mere making of the claim of deduction, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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