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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI M. BALAGANESH, AM & SHRI AMARJIT SINGH, JM
O R D E R PER BENCH: The assessee has filed the above mentioned appeals against the different order passed by the Commissioner of Income Tax (Appeals)- 51, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Ys. 2006-07 to 2010-11 in which the penalty levied by the AO has been ordered to be confirmed by the CIT(A). The assessee has filed the present appeal against the order dated 2. 26.06.2018 passed by the Commissioner of Income Tax (Appeals)-51, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. to 5023/M/2018 A.Ys. 2006-07 to 2010-11 2006-07 in which the penalty levied by the AO has been ordered to be confirmed.
3. The assessee has raised the following grounds: - “1. Under the facts and in law, the Hon’ble CIT(A) has erred in confirming the penalty of Rs.41,000/- levied under Section 271(1)(C).
2. The Hon’ble CIT(A) failed to appreciate the fact that the Learned AO had failed to arrive at a satisfaction as whether penalty proceeding are initiated for concealment or furnishing inaccurate particulars of income, resulting in the whole penalty proceeding void ab initio.
Your appellant craves leave to allow to add/alter/amend/withdraw any ground of appeal." The brief facts of the case are that search and seizure action u/s 4. 132 of the I. T. Act, 1961 was conducted on 25.08.2011 & 27.08.2011 in PPP Group of cases. The assessee was one of the persons belonging to this group. Notice u/s 153A of the Act was issued on 12.02.2013 which was served upon the assessee. In pursuance of notice u/s 153A of the Act, the assessee filed the return of income on 28.02.2013 admitting a total income of Rs.1,16,030/-. Notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The assessee filed the original return of loss on 23.03.2007 admitting total income of Rs.1.16.030/-. The assessee declared the business income of Rs.1,03,468/-, House Property Loss of Rs.3726 and Long Term Capital Gain of Rs.16,292/-. The assessee was engaged in the business of Trading in Cloth, Commission and Brokerage Income. The brief background of this case was that under search and seizure action was to 5023/M/2018 A.Ys. 2006-07 to 2010-11 taken against PPP Group of cases which comprised four persons including assessee Mr. Bhanwarlal M. Harsh and requisitions made u/s 133A which comprised Ten companies mentioned as under.:-
S. Name of the concern Directors/Proprietor No 1 Ms. Reena Thakkar Individual 2 Gopal B Harsh, S/o Shri Bhanwarlal M./ Individual Harsh 3 Vijay Kumar Kheria Prop. Rohit Properietor- M/s. Rohit Enterprises Enterprises 4 Tej Corporate Service P. Ltd. Shri Dinanath Yadav & Shri Pradeep Prajapati 5 Nahar Developers P. Ltd. As in 1 above 6 Nakshtra Electricals and Engineers P. Ltd. As in 1 above 7 Nova Corporate Services P. Ltd. As in 1 above 8 Nupur Management Consultancy P. Ltd. As in 1 above 9 Pantaloon Apparels P. Ltd. As in 1 above 10 Tarana Advertising & Marketing Services As in 1 above P. Ltd. 11 Tejaswini Multimedia P. Ltd. As in 1 above 12 Tissot Management Consultancy P. Ltd As in 1 above 13 Tiscon Sales Agency P. Ltd. As in 1 above The case of Shri Bhanwarlal M Harsh was covered u/s 153A of the Act who admitted about this fact to provide an accommodation entry. The statement of Shri Bhanwarlal M. Harsh was recorded. The expenses have been shown with M/s. Shriram Textile Mills to which no business was admitted by the assessee. No vouchers were produced, therefore, the expenses in sum of Rs.1,34,967/- was disallowed and added to the income of the assessee. The penalty ITA. Nos. 5019 to 5023/M/2018 A.Ys. 2006-07 to 2010-11 proceeding was initiated by issuance of notice. The AO levied the penalty to the tune of Rs.41,000/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who confirmed the penalty, therefore, the assessee has filed the present appeal before us.
We have heard the argument advanced by the Ld. Representative of the revenue and have gone through the case carefully. Anyhow, it is a case of disallowance of expenses claimed by the assessee. Disallowance of claim nowhere leads to penalty in view of the decision of PCIT Vs. Rasiklal M. Parikh, of 2017 and we also find support of the decision of Hon’ble Supreme Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC). The Hon’ble Supreme Court in the case of Reliance Petroproduct (supra) has held that the "A glance at the provision of section 271(1)(C) of the Income Tax Act, 1961, suggest that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word "particulars" used in section 271 (1)'c,) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. in order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. liv no stretch of imagination can making an incorrect c/anti tantamount to furnish to 5023/M/2018 A.Ys. 2006-07 to 2010-11 ink' inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, 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. To attract penalty, the details supplied in the return must not be accurate, not exact or correct. not according to the truth or erroneous. Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnish inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing of inaccurate particulars.”
In view of the said circumstances and by relying upon the decision in case of PCIT Vs. Rasiklal M. Parikh, of 2017 and CIT Vs. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC), we are of the view that the finding of the CIT(A) is not justifiable, therefore, we set aside the finding of the CIT(A) and delete the penalty.
ITA. Nos. 5020 to 5023/M/2018 7. All the appeals are on similar ground containing similar facts of the case, therefore, the finding given above while deciding the appeal bearing is quite applicable to the facts of all to 5023/M/2018 A.Ys. 2006-07 to 2010-11 cases as mutatis mutandis. Accordingly, we delete the penalty in these appeals also and allowed the appeals of the assessee.
In the result, the appeals filed by the assessee are hereby allowed.