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Income Tax Appellate Tribunal, DELHI BENCH ‘G’ : NEW DELHI
Before: SHRI ANIL CHATURVEDI & SHRI KULDIP SINGH
PER KULDIP SINGH, JUDICIAL MEMBER :
The Appellant, DCIT, Special Range 5, new Delhi (hereinafter referred to as the ‘Revenue’) by filing the present appeal sought to set aside the impugned order dated 20.06.2017 passed by the Commissioner of Income-tax (Appeals)-36, New Delhi affirming the penalty order dated 31.03.2016 passed under section 271(1)(c) of the Income-tax Act, 1961 (for short ‘the Act’), qua the assessment year 2009-10 on the grounds inter alia that :-
“1. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty of Rs.2,22,52,985/- imposed u/s. 271 (1)(c) of the Income Tax Act, 1 961 .
That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty imposed under section 271 (1)(c) by not appreciating the facts that the claim of the assessee in relation to expenditure incurred on construction of Bus Queue Shelter is of capital nature. The assessee too did not press the ground before the Hon'ble ITAT which tantamount to furnishing of inaccurate particulars of income under section 271 (1)(c) of the Income Tax Act, 1961 .
That the order of the Ld.CIT(A) is erroneous and is not tenable on facts and in law.
4. That the grounds of appeal are without prejudice to each other.”
2. Briefly stated the facts necessary for adjudication of the controversy at hand are : On the basis of assessment framed under section 143 (3) of the Act at an income of Rs.63,50,849/- after making disallowance u/s 115JB of the Act to the tune of Rs8,72,92,281/- on account of disallowance on account of expenses held to be capital in nature, Assessing Officer (AO) initiated the penalty proceedings u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income. Declining the contentions raised by the assessee that expenditure incurred on construction of Bus Queue Shelters (BQS) is bonafide and full & complete disclosure of facts have been made by the assessee in the return of income, AO levied the penalty to the tune of Rs.2,22,52,985/- @ 100% of the tax sought to be evaded for furnishing inaccurate particulars of income u/s 271(1)((c) of the Act.
3. Assessee carried the matter by way of an appeal before the ld. CIT (A) who has by following his earlier order deleted the penalty by allowing the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal.
We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
Ld. DR for the Revenue challenging the impugned order contended inter alia that when the assessee has accepted the quantum by not filing appeal, it amounts to furnishing of inaccurate particulars of income u/s 271(1)(c) of the Act and that expenditure incurred by the assessee on the construction of BQS is capital in nature. However, on the other hand, ld. AR for the assessee relied upon the order passed by the ld. CIT (A) and further contended that earlier order passed by the ld. CIT (A) in AYs 2007-08 & 2008-09 on identical facts have been confirmed by the Tribunal vide order dated 14.01.2020 (supra).
In the backdrop of the aforesaid undisputed facts & circumstances of the case, order passed by the lower revenue authorities and arguments addressed by the Ld. Authorized Representatives of the parties to the appeal, the sole question arises for determination in this case is:-
“as to whether the assessee has concealed particulars of income or has furnished inaccurate particulars of such income during assessment proceedings?” 7. Undisputedly, penalty proceedings have been initiated by the AO on the basis of disallowance made to the tune of Rs.8,72,92,281/- on account of disallowance on account of expenses held to be capital in nature. It is also not in dispute that in earlier years, identical issue has already been decided in favour of the assessee by the ld. CIT (A) who has followed his own order, which have been further confirmed by the coordinate Bench of the Tribunal vide order dated 14.01.2020 in & 5276/Del/2016 for Assessment Years 2007-08 & 2008-09.
We have perused the order dated 14.01.2020 (supra) passed by the Tribunal in assessee’s own case for Assessment Years 2007-08 & 2008-09 dealing with identical issue as to “whether expenditure incurred by the assessee on construction of BQS for and on behalf of New Delhi Municipal Corporation (NDMC) and Mumbai Metropolitan Region Development Authority (MMRDA) to the tune of Rs.8,72,92,281/- are capital in nature or revenue in nature?” On the identical facts, penalty was initiated and levied in earlier years but was deleted by ld. CIT (A) and his order has been confirmed by the coordinate Bench of the Tribunal on the ground that when the assessee has brought on record all the true and material facts in the return of income, it is merely a difference of opinion if these expenses are to be treated as capital or revenue in nature and is not a case of furnishing of inaccurate particulars of income.
Hon’ble Apex Court in case of CIT vs. Reliance Petro Products Pvt. Ltd. 322 ITR 158 (S.C.).(supra) held that merely making a claim which is not sustainable in law by itself would not amount to furnishing of inaccurate particulars by returning following findings :-
“A glance at the provisions of section 271(l)(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(l)(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(l)(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.”
Ld. CIT (A) has thoroughly thrashed the facts at hand in AYs 2007-08 & 2008-09 and during the year under assessment in the light of the law laid down by Hon’ble Apex Court and Hon’ble jurisdictional High Court. We are of the considered view that by claiming expenditure incurred by the assessee on construction of BQS for and on behalf of New Delhi Municipal Corporation (NDMC) and Mumbai Metropolitan Region Development Authority (MMRDA) to the tune of Rs.8,72,92,281/- as capital in nature does not amount to furnishing of inaccurate particulars of income. So, ld. CIT (A) has rightly deleted the penalty and finding no illegality or perversity in the impugned order, the appeal filed by the Revenue is dismissed. Order pronounced in open court on this 29th day of July, 2021.