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Income Tax Appellate Tribunal, DELHI BENCH “F”, NEW DELHI
Before: SHRI G.D. AGRAWAL & SHRI H.S. SIDHU
ORDER PER BENCH
Revenue has filed these 02 Appeals against the respective Orders both dated 01.08.2014 of the Ld. Commissioner of Income Tax (Appeals)-XVII, New Delhi pertaining to assessment years 2008-09 & 2009-10. Since the issues involved in these appeals are identical and common, hence, the appeals were heard together and are being disposed of by this common order for the sake of convenience, by dealing with (AY 2008-09). The following grounds have been raised in assessment year 2008- 09.
On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the penalty levied u/s. 271(1)(c) of the Income Tax Act, 1961 of Rs. 11,94,880/-.
The appellant craves to be allowed to add any fresh ground of appeal and / or delete or amend any of the grounds of appeal.
2. In another Appeal, identical issues are involved and similar grounds have been raised, the only difference is in the figures involved.
3. The brief facts of the case are that Assessee filed its e-return of income for AY 2008-09 on 29.9.2008 declaring NIL business income and income of Rs. 49,13,35,529/- under the head ‘Income from Other Sources’ after claiming deduction u/s. 80IA of the Income Tax Act, 1961 (hereinafter referred as the Act) of Rs. 35,43,46,298/-. The case of the assessee was picked up for scrutiny assessment and assessment was completed u/s. 143(3) of the Act on 15.12.2010 at a total income of Rs. 49,48,50,900/- (Income from Other sources) and book profit was determined at Rs. 128,79,80,181/- under special provisions of Section 115JB of the Act. The following additions were made to returned income and book profit:- Additions made:-
Interest paid to IGPCL = Rs. 35,15,373/- Book profit as declared = Rs. 111,52,63,943/- Add:- Provisions for ex-gratia = Rs. 8,96,238/- Capital spares = Rs. 17,18,20,000/- Assessed Book Profit = Rs. 128,79,80,181/- 3.1 Against the assessment order the assessee company has filed appeal before the Ld. CIT(A), who deleted the addition of Rs. 8,96,238/- and Rs. 17,18,20,000/- but confirmed the addition of Rs. 35,15,373/-. Accordingly, for the additions so made, penalty proceedings u/s. 271(1)© of the Act were initiated and penalty of Rs. 11,94,880/- was imposed u/s. 271(1)(c) of the I.T. Act, 1961 on the addition of Rs.35,15,373/- vide his order dated 13.3.2014 by holding that assessee has consciously made the concealment and furnished inaccurate particulars of income with a view to avoid imposition of tax by claiming the inadmissible expenses / deductions under the Income Tax Act, 1961. Against the penalty order dated 13.3.2014, the assessee appealed before the Ld. CIT(A), who vide his impugned order dated 01.08.2014 has deleted the penalty in dispute by allowing the appeal of the assessee. Aggrieved with the impugned order, the Revenue is in appeal before the Tribunal.
Ld. DR relied upon the penalty order passed by the AO and reiterated the contentions raised in the grounds of appeal.
5. On the other hand, Ld. Counsel of the assessee relied upon the order of the Ld. CIT(A) and has stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference. He however, relied upon decision of the Hon’ble Supreme Court of India in the case of CIT vs. Reliance Petro Products Ltd. in Civil Appeal No. 2463 of 2010.
We have heard both the parties and perused the records especially the impugned order, we find that penalty of Rs.11,94,880/- was imposed u/s 271(1)(c) of the Act on the addition Rs.35,15,373/-. The amount of Rs.35,15,373/- was interest paid to Indraprastha Power Generation Company. The AO stated that this expenditure was not allowable as a business expense. We find that during the appellate proceedings, assessee has stated that the AO has not given any finding that the details submitted by the assessee were incorrect or false. Hence, a mere making of an incorrect claim would not amount to furnishing inaccurate particulars. In view of the above, we are of the considered view that assessee had clearly not concealed or furnished inaccurate details in respect of addition of Rs.35,15,373/-. It is seen that all particulars had been furnished by the assessee. The AO also has not stated that particulars furnished were not correct or inaccurate. The bonafides of the assessee can be seen from the fact that all details were furnished. The AO has nowhere stated that the assessee had furnished false or fabricated bills or had claimed expenditure or particulars which were not correct. The action of the assessee is not deliberate or for concealment of income. There was no concealment of material facts. There was no intention of the assessee to conceal income and evade tax and mislead the revenue. However, we find that section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. Keeping in view of the facts and circumstances of the case, the assessee’s conduct cannot be said to be contumacious so as to warrant levy of penalty.
6.1 In this regard, we find that assessee’s counsel reliance from the Apex Court decision in the case of CIT vs. Reliance Petro Products Ltd. in Civil Appeal No. 2463 of 2010 is squarely applicable in the present case of the assessee. In this case vide order dated 17.3.2010 it has been held “……..making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars.
The appellant had given an explanation, which is bonafide, there is no furnishing of inaccurate particulars of income or deliberate attempt to conceal income.”
In the background of the aforesaid discussions and respectfully following the precedent, as aforesaid, we find that the levy of penalty in this case is not justified. Accordingly, we uphold the order of the Ld. CIT(A) on the deletion of penalty, which is a well reasoned order and does not require any interference on our part.
In the result, the Appeal filed by the Revenue stands dismissed.
As regards (AY 2009-10) is concerned, following the consistent view as taken in ITA 6191/Del/2014 (AY 2008-09), as aforesaid, we uphold the order of the Ld. CIT(A) on the issue of deletion of penalty and dismiss the Revenue’s Appeal.
In the result, both the Appeals filed by the Revenue stand dismissed.
Order pronounced on 18/12/2017.