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TMI Blog1998 (1) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... de while computing the income of the appellant. The appellant filed return of loss at Rs. 2,53,209 and same was assessed at an income of Rs. 1,19,282. The matter was adjudicated upon by the CIT(A) who allowed relief of Rs. 9,282 and subsequently by the Tribunal who allowed relief of Rs. 1,01,133. The assessed income settled at Rs. 8,867. In response to show-cause notice under s. 271(1)(c), the appellant replied to the show-cause notice and explained the cause for the eight items of disallowance. The AO imposed penalty and made discussion in para 3.1 of his order which is reproduced as under: "3.1 The assessee had claimed deduction under s. 80HHC amounting to Rs. 7,84,664 under s. 80HHC while the deduction was available wherein only at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment order at para 6 and the calculation was not disputed by the appellant in appeal. As such the CIT(A) did not find any merit in the explanation that no penalty could be levied for excess deduction claimed, with the observation that the stand taken by the appellant is neither an explanation nor substantiated or proved to be bona fide. The appellant has taken ground in appeal that there is no evidence to establish that there was deliberate attempt on the part of the assessee for furnishing the alleged inaccurate particulars with respect to deduction under s. 80HHC. The learned counsel of the appellant took the first legal plea that he relied on the decision of Hon'ble Punjab Haryana High Court in the case of CIT vs. Prithipal Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished." The Hon'ble Punjab Haryana High Court has taken decision in the case of CIT vs. Prithipal Singh Co. and the decision of the Hon'ble High Court is reproduced as follows: "Penalty is always imposed and paid in addition to the tax payable. When there is no tax payable, the question of any penalty does not arise. In fact, evasion of tax is the sine qua non for imposition of penalty. Clause (iii) deals with cases referred to in cl. (c) under sub-s. (1) of s. 271 of the Act and it clearly provides therein that the penalty or further sum payable by a person would be in addition to any tax payable by him. Expln. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, are attracted only in the case of an assessee having positive income and not loss, as the question of concealment of income to avoid payment of tax would arise only in the former case. Penalty is a deterrent measure to prevent evasion of tax and when there was no tax payable, there could not be any such evasion so as to provide a scope for levying any penalty. In the present case, only the loss has been reduced and it cannot be said that the assessee had suppressed any income which would have attracted liability to tax. The question of imposition of penalty, therefore did not arise. Thus, on the facts and in the circumstances of the case, the Tribunal has acted rightly in law in holding that the provisions of the Expln. to s. 271(1)(c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e figures are taken from the information supplied by the appellant himself. There is nothing on record to show that the appellant has filed any figure which is wrong or incorrect. Sec. 80HHC(4) provides that the claim shall be furnished in a prescribed form along with report of an Accountant which will certify that the deduction has been correctly claimed in accordance with the provisions of this section. After filing the certificate of the Chartered Accountant, a minor variation in calculation cannot be treated as concealment. We, therefore, cancel the order passed by the CIT(A). The appeal is accepted. ITA No. 709/(Asr)/91: 8.The AO has imposed penalty under s. 273(2)(aa) of the IT Act. He has observed that the assessment in this ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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