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TMI Blog2024 (12) TMI 1380X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the action of the AO and that of the CIT(A) cannot be countenanced. Assessee s reliance on the decision of Reliance Petro products Limited [ 2010 (3) TMI 80 - SUPREME COURT] that making inaccurate claim in law cannot tantamount to furnishing inaccurate particulars is applicable to the present case as all the details of capital gain transactions in dispute are very much part of the Return of Income along with the Schedules. We are of the considered opinion that, the penalty u/s.271(1)(c) is not warranted and hence we are inclined to delete the same. Decided in favour of assessee. - Shri Mahavir Singh, Hon ble Vice President And Shri S. R. Raghunatha, Hon ble Accountant Member For the Appellant : Shri. Vikram Vijayaraghavan, Advocate For the Respondent : Ms. R. Anita, Addl. CIT ORDER PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 02.05.2023 and pertains to assessment year 2014-15. 2. At the outset, we find that there is a delay of 294 days in appeal filed by the assessee, for which petition for condona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lower than what he would be rightly liable for even if the income alleged to have escaped assessment had been taken into account. 2.6 This on reopening there was no reduction of taxable income nor was there any carry forwarded loss were reduced. Merely eligible capital loss was not claimed on the mistaken impression that it is exempt. Hence there was no escapement of income. 3. The Appellant craves leave to file additional grounds of appeal at the time of hearing. 4. The brief facts of the case are that, the assessee is an individual and for the Assessment year 2014-15 filed his return of income admitting an income of Rs. 1,48,56,617/-. The Order u/s.143(3) of the Act was passed on 22.11.2016 admitting the return of income. Initially, on merits, notice u/s.147 was issued on the appellant in respect of claim u/s.10(38) (being exemption from long-term capital gains by selling equity shares of an equity-oriented mutual fund) of Rs. 1,60,97,683/-. The assessment was reopened u/s.147 stating out of the total claim u/s.10(38) claim of Rs. 1,60,97,683/-, 11 transactions amounting to Rs. 65,52,232/- did not pertain to the debt mutual funds and hence have to be disallowed and added back to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his reply on 21.09.2021. He has furnished brokers statement from The Allegro Capital Advisors Pvt Ltd with respect to the mutual fund and his reply explaining the transactions. The reply of the Assessee has been perused. In view of the reply/documents furnished by the Assessee, the return income of the Assessee is accepted and assessed. The reassessed income is the same as the originally assessed income u/s.143(3). Penalty uls.271(1)(c) is hereby initiated for furnishing inaccurate particulars of income as the Assessee has claimed wrong exemption u/s.10(38). (emphasis added) 2. On lower authorities' orders: a. In the penalty order u/s.271(1)(c) dated 05.01.2022, the AO's only contention is that the Assessee had furnished inaccurate particulars to claim u/s.10(38). b. The CIT(A) dated 05.01.2022 on the penalty u/s.271(1)(c) also held on the basis that the assessee had furnished inaccurate particulars in claiming wrong exemption u/s.10(38). 7. Further, the CIT(A) relies on irrelevant decisions such as DCJT vs. Raj Lalwani 132 /TD 109 (ITAT Delhi) where the issue was the explanation of assessee was not supported by any material on record which is not at all the case here as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs Reliance Petro products Limited reported in 322 ITR 158 that making inaccurate claim in law cannot tantamount to furnishing inaccurate particulars. In the said case, the Assessee claim of deduction of interest expenditure which was not accepted by the Revenue and the Supreme Court held that the mere making of claim not sustainable in law by itself will not amount to furnishing inaccurate particulars regarding income of the Assessee and deleted the penalty u/s.271(1)(c). In doing so, the Supreme Court has held as following: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforementioned decision which pertained to the penalty proceedings in Tamil 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 appellant'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 CIT(A) and the High Court have correctly reached this conclusion and, therefore, the appeal filed by the Revenue has no merits and is dismissed. (emphasis supplied) 8.1 In this context, the ld.AR submitted that the assessee s Income Tax Return along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income by claiming wrong exemption u/s.10(38) and confirmed the penalty of Rs. 24,65,583/-, which has been confirmed by the ld.CIT(A). 11. We note that the assessee s return of income was accepted by the AO in two assessment orders without any additions. Hence, it is admitted fact that the AO has not found any mistake / errors in the income declared / offered by the assessee. In this case, even if the computation has been properly made, then there would be no escapement of income and hence reopening should have been dropped and consequently no penalty can be imposed on the reassessment order. Therefore, the action of the AO and that of the ld.CIT(A) cannot be countenanced. 12. Further, we find that the assessee s reliance on the decision of the Hon'ble Supreme Court in CIT Vs Reliance Petro products Limited (supra) that making inaccurate claim in law cannot tantamount to furnishing inaccurate particulars is applicable to the present case as all the details of capital gain transactions in dispute are very much part of the Return of Income along with the Schedules. 13. In the facts and circumstances of the case, we are of the considered opinion that, the penalty u/s.271(1)(c) i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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