P N INTERNATIONAL,LUCKNOW vs. DCIT/ACIT-3,LUCKNOW-NEW, LUCKNOW

ITA 695/LKW/2025Status: DisposedITAT Lucknow29 June 2026AY 2016-177 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that simply making an incorrect legal claim does not constitute furnishing inaccurate particulars or concealment of income if all relevant details are provided. Relying on the Supreme Court's decision in CIT vs. Reliance Petro Products Pvt. Ltd., the Tribunal found no justification for levying the penalty.

What were the facts?

The assessee claimed sponsorship expenses for the higher education of partners' children abroad, including personal expenses. The Assessing Officer disallowed these personal expenses, and the assessee surrendered the amount to avoid litigation. Subsequently, a penalty was levied under Section 271(1)(c).

What were the issues?

Whether a penalty under Section 271(1)(c) can be levied for an incorrect claim of business expenditure when all details are provided and the amount is surrendered to buy peace, or if it constitutes furnishing inaccurate particulars of income.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW ‘A’ BENCH, LUCKNOW

Hearing: 13.05.2026Pronounced: 29.06.2026

PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the orders of the ld. CIT(A) under section 250 of the Income Tax Act, 1961 dated 22.07.2025, wherein the ld. CIT(A) has dismissed the appeals of the assessee against the penalty levied under section 271(1)(c), by the Assessing Officer upon the assessee for the assessment year 2016-17 on 17.01.2022. The grounds of appeal are as under:- “1. That the Ld. Assessing Officer has erred in law by invoking Explanation 1 to u/s 271(1)(c) of the Income Tax Act, 1961 at the time of invoking penalty of Rs. 24,74,438/-as well as National Faceless Appeal centre by confirming the said penalty by overlooking the fact that the said explanation is applicable only for

The order continues below.

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