DCIT, NEW DELHI vs. M/S. RIPE COMPONENTS TECHNOLOGIES PVT. LTD., NEW DELHI

ASSESSEE BY : None REVENUE BY : Shri Deepak Garg, Senior DR Date of Hearing : 27.09.2017 Date of Order : 29.09.2017

O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : The appellant, Deputy Commissioner of Income-tax, Circle 15 (1), New Delhi (hereinafter referred to as ‘the Revenue’), by filing the present appeal, sought to set aside the impugned order dated 29.08.2014 passed by the Commissioner of Income-tax- XVIII, New Delhi qua the assessment year 2008-09 deleting the penalty levied u/s 271(1)(c) on the ground that :-

“On the facts and circumstances of the case and law, the Ld. CIT (A) has erred in deleting the penalty of Rs.10,76,340/- by not appreciating the findings of the Assessing Officer and material evidence on record.” 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : assessment of the assessee for Assessment Year 2008-09 was completed under section 143 (3) of the Income-tax Act, 1961 (for short ‘the Act’) at an income of Rs.5,65,78,592/- as against the returned income of Rs.5,95,36,759/-. During the quantum proceedings, the assessee had claimed depreciation to the tune of Rs.31,97,677/- on account of temporary structure which was disallowed and consequently AO expressed his satisfaction to initiate the penalty proceedings u/s 271(1)(c) of the Act.

Feeling aggrieved, the assessee has come up before the Tribunal by way of challenging the impugned order passed by ld. CIT (A).

“as to whether the assessee has concealed particulars of income or has furnished inaccurate particulars of income during assessment proceedings?”

Hon’ble Supreme Court in a case cited as CIT vs. Reliance 9.

Petro Products Pvt. Ltd – 322 ITR 158 (SC), while interpreting the provisions contained u/s 271(1)(c) of the Act, decided the identical issue in favour of the assessee. Operative part of which is reproduced for ready reference as under :-

“A glance at the provisions of section 271(1)(c) of the I.T. Act, 1961 suggests 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 detail 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. By no stretch of imagination can making an incorrect claim tantamount to furnishing 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 furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars.”