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Income Tax Appellate Tribunal, MUMBAI BENCHES, ‘E’ MUMBAI
Before: Shri Joginder Singh, & Shri Manoj Kumar Aggarwal
आदेश / O R D E R Per Joginder Singh(Judicial Member) The assessee is aggrieved by the impugned order dated 04/12/2015 of the Ld. First Appellate Authority, Mumbai, confirming the imposition of penalty amounting to Rs.5,82,000/- u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter the Act).
During hearing, Ld. Counsel for the assessee Ms. Purvi Gupta, argued that a bona-fide claim was made by the assessee, therefore, penalty u/s.271(1)(c) of the Act may not be imposed. It was claimed that even if a wrong claim is made still the assessee gets shelter from the decision from Hon'ble Apex Court in Reliance Petro Products Pvt. Ltd. 322 ITR 158 (SC). On the other hand, Shri V. Justin, Ld. DR claimed that the assessee made a wrong claim which was disallowed by the Assessing Officer, therefore, penalty u/s.271(1)(c) of the Act was rightly imposed/confirmed. The crux of the argument is in support of the penalty.
2.1 We have considered the rival submissions and perused the material available on record. The facts in brief are that the assessee is engaged in the business of Technocraft Industries (India) Ltd. manufacture and exporting of drum closures, pipe and cotton yarn. The assessee declared total income of Rs.29,48,92,807/- after claiming Rs.1,25,000/- as deduction u/s 80G of the Act. Subsequently, the assessee revised the income to Rs.29,50,44,322/- on 23/04/2009, which was processed u/s 143(1) of the Act. Later on the case of the assessee was selected for scrutiny, therefore, notice u/s 143(2) and 142(1) of the Act was served upon the assessee.
The assessee attended the proceeding and furnished various details as is evident from Assessing Officer itself. The Ld. Assessing Officer made disallowance with respect to bank guarantee charges paid on behalf of foreign subsidiary and imposed penalty of Rs.5,82,000/- with respect to claim of such expenses of bank guarantee charges.
On appeal before the Ld. Commissioner of Income Tax (Appeal), the penalty was confirmed which is under challenged before this Tribunal. Considering the totality of facts, we are of the view that even if a wrong claim is made still it is not the case that the assessee concealed his income or furnished inaccurate particulars of such income. It is the duty of the Assessing Officer to allow/disallow the claim of Technocraft Industries (India) Ltd. the assessee. In such a situation, the decision from Hon'ble Apex Court in Reliance Petro Chemicals(322 ITR 158 (SC)) comes to the rescue of the assessee, wherein the Hon'ble Court held that even if a wrong claim is made that automatically does not lead to the conclusion that the assessee concealed its income or furnished inaccurate particulars of such income. In the return filed by the assessee, the assessee made the claim which may not be accepted by the Assessing Officer, therefore, in our opinion, neither there is concealment nor furnishing of inaccurate particulars of such income, thus, the penalty is directed to be deleted, resultantly, the appeal of the assessee is allowed.
Finally, the appeal of the assessee is allowed.
This Order was pronounced in the open court in the presence of Ld. representative from both sides at the conclusion of hearing on 16/05/2018.