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TMI Blog2022 (11) TMI 712X X X X Extracts X X X X X X X X Extracts X X X X ..... rate particulars of income and confirmed by the Ld. CIT(A) is deleted. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ses. During the year the assessee had maintained the following bank accounts as proprietor in which cash credits were made as under: Name of the Bank Account no. Amount Rs. Yes bank, Mall Road, Amritsar CA 005183800001847 43,48,500/- P & S Bank, Parag Dass, Amritsar CC 04891300001119 P & SBank, Parag Dass, Amritsar CA/1119 4,000/- Loan a/c with P&S bank, Amritsar 04891200000012 1,00,000/- P& S Bank, Parag Dass, Amritsar C A 881 23,28,316/- Accordingly, Rs. 56,76,816/- was taken as the turnover of the appellant and assessment was completed by Ld AO applying NP rate of 8% as applied u/s 44 A.D. of the Act on the gross turnover of Rs. 66,76,816/- which came to Rs. 5,34,145/- as against Rs. 1, 82,S 70/- declared in the original return of income. The impugned penalty of 39,504/- has been levied u/s 271(l)(c) of the Act for furnishing inaccurate particulars of income on the above addition to the returned income. (ii) During appeal, it is contended by Ld AR that the penalty u/s 271(l)(c) has been wrongly levied on mere difference of opinion. It is further submitted that cash sums Rs,43,48,500/- deposited in the YES Bank had no bearing on the sales/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant in the return of income. The argument of Ld. AR that the addition has been made on a mere difference of opinion is rejected. The addition to the returned income has been made in this case on the basis of cash credits in the bank account of the appellant which were far in excess for the declared turnover. In view of the above facts, it is held that the penalty of Rs.39,504/- has been rightly levied u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income." 5. The appellant assessee contended in grounds that the Learned AO erred in imposing penalty of Rs. 39,504/- being addition made on credit summation made by the assessee, completely ignoring the facts submitted by the assessee and that there was mere a difference of opinion between the assessee and the AO. Merely difference of opinion does not construe that the assessee has furnished inaccurate particulars of return. The subject matter is debatable. It is a case of estimation of income where levying penalty u/s 271(1)(c) is not justified. 6. Having heard the ld. additional CIT DR, perusal of record and impugned order, we find that undisputedly, assessee's income has been estimated considering the depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. In this connection, it is relevant to quote the decision of the Hon'ble Supreme Court reported in CIT v. Reliance Petroproducts (P) Ltd. [2010] 322 ITR 158/189 Taxman 322 (SC) in which it is observed that in order to bring the case under Section 271(1)(c) of the Act, there has to be concealment of particulars of the income of the assessee and the assessee must have furnished inaccurate particulars of his income. It was further pointed out by the Hon'ble Supreme Court that in order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. It is further pointed out that making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. The relevant portion of the decision reads as follows:- "7. As against this, the learned counsel appearing on behalf of the respondent pointed out that the language of Section 271(1)(c) had to be strictly construed, this being a taxing statute and more particularly the one providing for penalty. It was pointed out that unless the wording directly covered the assessee and the fact situation herein, there could not be any penalty under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Dharamendra Textile Processors [2008] 166 Taxman 65 (SC), as also, the decision in UOI v. Rajasthan Spinning & Weaving Mills [2009] 180 Taxman 609 (SC) and reiterated in para 13 that: "13. It goes without saying that for applicability of S.271(1)(c), conditions stated therein must exist." 8. Therefore, it is obvious that it must be shown that the conditions under Section 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. When such particulars are found to be inaccurate, the liability would arise. In Dilip N. Shroff v. CIT [2007] 161 Taxman 218 (SC), this Court explained the terms 'concealment of income' and 'furnishing inaccurate particulars'. The Court went on to hold therein that in order to attract the penalty under Section 271(1)(c), mens rea was necessary, as according to the Court, the word inaccurate signified a deliberate act or omission on behalf of the assessee. It went on to hold that clause (iii) of Section 271(1) provided for a discretionary jurisdiction upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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