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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’: NEW DELHI
Before: SHRI G.D. AGRAWAL, HON’BLE & SHRI SUDHANSHU SRIVASTAVA
This appeal, filed by the assessee, is directed against the order of the CIT(A)-XXVIII, New Delhi dated 16.09.2014 and pertains to assessment year 2010-11 confirming the imposition of penalty of Rs. 32,540/- imposed u/s 271(1)(c) of the Income Tax Act, 1961.
ITA 6591/Del/2014 Assessment Year 2010-11 2. Following grounds have been raised in the appeal:-
“1. Learned Commissioner of Income Tax (Appeals) has erred in law, facts and circumstances of the case by confirming the penalty order of the learned Assessing officer. Learned Commissioner of Income Tax (Appeals) has mis-understood the facts of the case.
Learned Commissioner of Income Tax (Appeals) has mis- interpreted the judgments of Hon’ble apex court in the case of Price Water House Coopers Pvt. Ltd. Vs CIT, CIT vs. Reliance Petro Products Pvt. Ltd. and Delhi High Court judgment in the case of CIT vs. Brahmaputra Consortium Ltd. These judgments squarely apply to the facts and circumstances of the case of the Assessee.
Learned Commissioner of Income Tax (Appeals) has further mis-interpreted the judgment of Supreme Court in the case of Dilip N. Shroff vs. Jt. CI1 (2007) 210 CTR (SC). 3. The Learned Commissioner of Income Tax (Appeals) has further erred while relying upon the decision of Hon’ble High Court in the case of CIT Vs. MAK Data Ltd. The facts of this case are totally different from the facts of the case of the assessee. *1 The appellant craves to amend or add any one or more grounds of appeal
.”
3. An application was received on behalf of the Ld. Senior DR stating that the Ld. Senior DR was absent and adjournment was sought by the department on this ground. However, looking into the facts of the case, we deem it fit to proceed with the hearing ex parte qua the department.
Brief facts of the case are that the assessee is a Senior Advocate in Delhi High Court and during the year under consideration, a return declaring income at Rs. 1,37,96,450/- ITA 6591/Del/2014 Assessment Year 2010-11 was filed. The case was selected for scrutiny and during the course of assessment proceedings, the Assessing Officer observed that during the year under consideration, the assessee, as compared to the return of income filed for Assessment Year 2009- 10, had not declared any income of his minor children. On query, the assessee submitted that income of Rs. 5,295/- had been omitted from being included in the return due to oversight.
Accordingly, the Assessing Officer proceeded to make an addition of Rs. 5,295/- after granting basic exemption of Rs. 1500/- per child. Further, the Assessing Officer also noticed that the assessee had shown a gift of Rs. 1 lakh as received from a relative and credited to his capital account. The Assessing Officer proceeded to add the said gift to the income of the assessee u/s 56(vii) of the Act. Penalty proceedings u/s 271(1)(c) of the Act were also initiated on account of these two additions and a penalty of Rs. 32,540/- was imposed for furnishing inaccurate particulars of income leading to concealment of income. The Ld. CIT (A) also confirmed the penalty and now, the assessee has approached the ITAT challenging the confirmation of the said penalty.
Ld. Authorised Representative submitted that the gift of Rs. ITA 6591/Del/2014 Assessment Year 2010-11 1 lakh had been received from the assessee’s relative who was his ‘Mama’s son’ and was not included in the definition of relatives as
per the provisions of Section 56(vii) and, therefore, it was not a case of concealment. It was also submitted that the amount had been duly disclosed as a credit in the capital account and, therefore, it could not be said that the assessee had filed inaccurate particulars of income. It was further submitted that the minor’s income clubbed under the provisions of section 64 of the Act had been omitted due to oversight and this explanation of the assessee was bona fide as the assessee had filed return of income declaring an income of Rs. 1,37,96,450/- and had duly paid the tax thereon and in such circumstances, any avoidance of tax due on Rs. 5,295/- was not the intention of the assessee. It was prayed that the penalty imposed may be deleted.
Having heard the Ld. Authorised Representative as well as after having perused the material on record, we find that the assessee’s claim that Mama’s son is covered under the definition of relative u/s 56(vii) of the IT Act is incorrect. However, there is no denial of the fact that the addition on account of this claim was very much part of the return filed by the assessee and, thus, there was neither any concealment nor any furnishing of ITA 6591/Del/2014 Assessment Year 2010-11 inaccurate particulars in the strict sense of the term. Similarly, the assessee’s explanation regarding inadvertence of including the minor children’s income in the return of income cannot be said to be lacking in bona fide as the assessee has paid income tax amounting to Rs. 54,79,406/- during the year under consideration. With regard to the provisions of section 271(1)(c ) of the Act pertaining to penalty, the Hon’ble Apex Court has authoritatively laid down that making of a claim by the assessee which is not sustainable will not tantamount to furnishing inaccurate particulars. In CIT vs. Reliance Petroproducts Pvt. Ltd. reported in [2010] 322 ITR 158, the Hon’ble Apex Court has held as follows:
“A glance at this provision would suggest that in order to be covered, there has to be concealment of particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The present is not a case of concealment of income. That is not the case of the Revenue either. However, the Ld. Counsel for the revenue suggested that by making incorrect claim for the expenditure on interest, the assessee has furnished inaccurate particulars of income. As per Law Lexicon, the meaning of the word "particular" is a detail or details (in plural sense); the details of a claim, or the separate items of an account. Therefore, the word "particulars" used in the section 271 (1) (c) would ITA 6591/Del/2014 Assessment Year 2010-11 embrace the meaning of the details of the claim made. It is an admitted position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The learned counsel argued that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income." We do not think that such can be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars.”
Although, both the lower authorities have held that the assessee has concealed income/furnished inaccurate particulars
of income, on an overall consideration on the facts, such a view is not tenable is the present appeal. The amount of gift received has been duly reflected in the return of income. Further, the asseseee is a tax-payer who has paid a huge amount of income tax during the year and therefore an omission to include a paltry amount of Rs. 5,295/- due to oversight cannot be inferred as to be lacking in bona fide. Therefore, looking into the circumstances ITA 6591/Del/2014 Assessment Year 2010-11 and respectfully following the judgment of the Hon’ble Apex
Court in the case of Reliance Petroproducts Pvt. Ltd. (Supra) we are unable to agree with the view taken by the Ld. CIT (A) and we set aside the impugned order and direct the Assessing Officer to delete the penalty.
In the result, the appeal of the assessee stands allowed.
The order is pronounced in the open court on 4th October, 2017.