VASAI VIKAS SAHAKARI BANK LTD,MUMBAI vs. ACIT CIR 4, THANE

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ITA 1231/MUM/2016Status: DisposedITAT Mumbai22 March 2018AY 2009-103 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that merely making a claim not sustainable in law does not amount to furnishing inaccurate particulars of income. Following a coordinate bench's decision in an identical case for a different assessment year, the penalty was deleted.

What were the facts?

The assessee claimed a deduction under Section 36(1)(viia) without a corresponding debit in its Profit & Loss account. This led to the levy of penalty under Section 271(1)(c) by the AO and confirmation by the CIT(A).

What were the issues?

Whether penalty under Section 271(1)(c) can be levied for claiming a deduction without a corresponding debit in the P&L account, and if such a claim constitutes furnishing inaccurate particulars of income.

Which sections of the Income-tax Act were involved?

Section 36(1)(viia),Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “F ” BENCH, MUMBAI

Before: SHRI SHAMIM YAHYA, AM & SHRI PAWAN SINGH, JM

For Appellant: Shri Bhupendra Shah, Shri Ram Tiwari
For Respondent: Shri Ram Tiwari

O R D E R Per Shamim Yahya, A. M.: This appeal by the assessee is directed against the order by the Commissioner of Income Tax (Appeals) dated 01.12.2015 and pertains to the assessment year 2009- 10.

2.

The grounds of appeal

read as under:

1.

1. In the facts and circumstances of the case and in law, the learned A.O. erred in levying penalty of Rs.22,42,719/- in respect of the claim of deduction u/s. 36(1)(viia).

Vasai Vikas Sahakari Bank Ltd. 2. In the facts and circumstances of the case and in law, the learned ld. Commissioner of Income Tax (Appeals) erred in confirming the same by disregarding several judgments and also overlooking the fact that similar penalty was deleted in A.Y. 2010-11.

3.

We have heard both the counsel and perused the records. The brief facts leading to the levy of penalty was that the assessee has claimed deduction u/s. 36(1)(viia) through computation of income, without corresponding debit being made to P & L account. Upon this disallowance, penalty u/s. 271(1)(c) was also levied and confirmed.

4. The ld. Counsel of the assessee submitted that in the identical situation, similar penalty levied in the assessee’s own case for assessment year 2010-11, this Tribunal in vide order dated 22.3.2017 has deleted the penalty by observing as under:

4.

We have heard the rival contention of both the parties. We find that the assessee has merely failed to provide the provision in bad debt and doubtful debt though the provision is made as per RBI guidelines in the earlier was excess. The assessee has directly claimed the deduction in computation of income instead of providing same in the books for debting in the P & L account as per the provisions of the Act. Therefore, the assessee had neither concealed nor filed any inaccurate particulars of income. the assessee has duly disclosed the facts of income in its return of income filed before the department. Therefore, we are of the view that the issue in controversy is covered by the decision of Hon’ble Supreme Court in the case of CIT vs. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158 (SC) Petroproduct (supra) wherein it is held that a mere making claim which is not sustainable in law will not amount to furnishing inaccurate particulars regarding the income of the assessee. such claim made in return cannot amount to inaccurate particular and no penalty u/s. 271(1)(c) can be imposed.

Vasai Vikas Sahakari Bank Ltd. 5. Upon carefully considering the facts we find that since in the identical situation the ITAT has confirmed the deletion of the penalty, on same facts penalty cannot be levied. Hence, respectfully following the decision of the co-ordinate bench in the assessee’s own case, we set aside the orders of the authorities below and delete the levy of penalty.

6.

In the result, this appeal by the assessee stands allowed. प�रणामतः �नधा�रती क� अपील �वीकृत क� जाती है । Order pronounced in the open court on 23.03.2018 Sd/- Sd/- (Pawan Singh) (Shamim Yahya) �या�यक सद�य / Judicial Member लेखा सद�य / Accountant Member मुंबई Mumbai; �दनांक Dated : 23.03.2018 व.�न.स./Roshani, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2. आयकर आयु�त(अपील) / The CIT(A) 3. आयकर आयु�त / CIT - concerned 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 5. गाड� फाईल / Guard File 6. आदेशानुसार/ BY ORDER,

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