LATE SHRI DASARI NARAYANA RAO REP BY L/H SHRI DASARI ARUN KUMAR,HYDERABAD vs. ITO (OSD) NON CORPORATE CIRCLE 20, CHENNAI

is filed against the order of the CIT(Appeals) confirming the penalty levied under Section 271(1)(c) of the Income-tax Act, 1961 (in short 'the Act') for the assessment year 2005-06, whereas, is filed against the order of the CIT(Appeals) for regular assessment for assessment year 2011-12. Therefore, we heard both the appeals of the assessee together and disposing of the same by this common order.

Sh. B. Ramakrishnan, the Ld. representative for the assessee, submitted that the assessee claimed deduction under Section 80G of the Act and also remission of liability under Section 41(1) of the Act in respect of Shri V. Venkatarao. In fact, according to the Ld. representative, the assessee claimed deduction under Section 80G of the Act to the extent of ₹1,00,000/-. The assessee could not produce receipt in respect of the payment made to the extent of ₹10,000/-, therefore, the Assessing Officer restricted the disallowance to ₹50,000/-. In respect of remission of liability, according to the Ld. representative, the Assessing Officer found that it could not be ruled out the possibility of being a trading liability, therefore, it is the income of the assessee under Section 41(1) of the Act. According to the Ld. representative, the assessee has furnished entire details and claimed remission under Section 41(1) of the Act as deduction. According to the Ld. representative, mere claim after furnishing entire details cannot be construed as furnishing inaccurate particulars of income or concealing any part of income of the assessee, therefore, the CIT(Appeals) is not justified in confirming the penalty levied by the Assessing Officer.

We heard Shri R. Clement Ramesh Kumar, the Ld. Departmental Representative also. The assessee claimed deduction to the extent of ₹1,00,000/- under Section 80G of the Act and also deduction in respect of remission of liability with regard to one Shri V. Venkatarao. This Tribunal is of the considered opinion that making mere claim by furnishing all particulars to the Assessing Officer cannot be construed to be concealment of income or furnishing inaccurate particulars of income. As held by Apex Court in the case of CIT Vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158, a mere claim in the return of income cannot be construed to be concealment of income or furnishing inaccurate particulars of income. In view of this judgment of Apex Court, this Tribunal is unable to uphold the orders of the authorities below. Accordingly, orders of both the authorities below are set aside and the penalty levied by the Assessing Officer is deleted.

Now coming to the assessee’s appeal in I.T.A.

Sh. B. Ramakrishnan, the Ld. representative for the assessee, submitted that the first ground of appeal is with regard to interest claimed by the assessee to the extent of ₹8,10,000/-. The Ld. representative, during the course of hearing, submitted that he is not pressing this ground. The Ld. representative also made an endorsement to this effect in the grounds of appeal filed before this Tribunal. In view of the above, the ground with regard to claim towards interest is dismissed as not pressed.

In the result, the assessee’s appeal in is allowed and the appeal in I.T.A. No.2378/Chny/2018 is partly allowed for statistical purposes.