VASAI VIKAS SHAKARI BANK LTD,VASAI vs. DCIT CIR 4, THANE

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ITA 6660/MUM/2016Status: DisposedITAT Mumbai22 March 2018AY 2012-133 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 or concealment of income. Following a co-ordinate bench's decision in the assessee's own case for an earlier year, the penalty was deleted.

What were the facts?

The assessee claimed a deduction under Section 36(1)(viia) without a corresponding debit to the Profit & Loss account. This led to the levy of penalty under Section 271(1)(c).

What were the issues?

Whether a penalty under Section 271(1)(c) can be levied when a deduction is claimed which is not supported by a corresponding debit in the P&L account, and if such a claim constitutes concealment or furnishing of inaccurate particulars.

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: Ms. Pooja Swaroop
For Respondent: Ms. Pooja Swaroop

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 14.06.2016 and pertains to the assessment year 2012- 13.

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.25,40,650/- in respect of the claim of deduction u/s. 36(1)(viia), which is neither concealment of income nor is furnishing of inaccurate particulars of income.

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 the learned departmental representative and perused the records.

None appeared on behalf of the assessee despite notice. 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. It transpires 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 22.03.2018 Sd/- Sd/- (Pawan Singh) (Shamim Yahya) �या�यक सद�य / Judicial Member लेखा सद�य / Accountant Member मुंबई Mumbai; �दनांक Dated : 22.03.2018 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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