ITO 24(2)(3), MUMBAI vs. KAPIL ASHOK BAJAJ, MUMBAI

On the other hand, Shri Sandesh Rane, learned counsel for the Assessee, defended the conclusion arrived at in the impugned order by contending that neither there is concealment of income nor furnishing of inaccurate particulars of such income. Therefore penalty is not leviable.

I have considered the rival submissions and perused the material available on record. The facts in brief are that the assessee originally declared nil income in its return. A survey action under section 133A of the Act was carried out at the business premises of the assessee on 24.08.2007. The assessee did not claim any additional income and practically nothing really much turns during the survey. During the year the assessee had included the profits/results from B and C wings of Vastu Project at Thane. The assessee claimed exemption/deduction under section 80IB(10) in respect of the profit from Vastu Project. Assessment was completed under section 143(3) of the Act denying the claimed deduction sought under section 80IB(10). The learned Assessing Officer imposed penalty under section 271(1)(c) of the Act.

On appeal before the learned CIT(A) the impugned penalty was deleted against which the Revenue is in appeal before this Tribunal.

If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, I find that a perusal of the fact shows that the penalty was imposed under section 271(1)(c) of the Act with respect to disallowance of claim made under section 80IB(10) of the Act with reference to B and C wings of Vastu Projects at Thane. Broadly the disallowance was made by the Assessing Officer that the project on which construction was made was having the area less than one acre and some of the flats, sold by the assessee were exceeding the area of 1000 sq.ft. The explanation of the assessee was not found convincing by the Assessing Officer. There is no denyal to the fact that the project was completed on the basis of plans approved by the competent authority. So far as the issue of area exceeding 1000 sq.ft. it was explained that the flats were bought independent of each other and at the later stage the buyers/ occupants got them combined. It is also noted that while adjudicating the quantum addition the explanation of the assessee was accepted by the learned First Appellate Authority as is mentioned in para 5.7 of the impugned order. Considering the totality of facts and the decision from Hon’ble Apex Court in Reliance Petroproducts Ltd. (322 ITR 152) (SC), CIT vs. Fortis Financial Services (ITA No. 243 of 2011 and 244 of 2011) (Del), Shivlal Desai & Sons (114 ITR 377) (Bom), Indersons Leathers (329 ITR 167) (P&H) I found force in the argument of the learned Counsels for the assessee. It is not the case of the Revenue that either the assessee concealed its income or furnished inaccurate particulars of such income. The Hon’ble Apex Court in Reliance Petroproducts P. Ltd. (supra) clearly held that in order to expose the assessee to the penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. Therefore it is obvious that in order to attract the penalty provision under section 2171(1)(c) either there should be concealment of income or furnishing of inaccurate particulars. The can be no dispute that everything would depend up on the written filed by the assessee because which is the basic document where the assessee can furnish the particulars of his income. In view of the factual matrix and the judicial decisions discussed hereinabove I find no infirmity in the conclusion rendered by the CIT(A). It is affirmed.

Finally, the appeal of the Revenue is dismissed. This order was pronounced in the open court in the presence of the ld. representative from both sides at the conclusion of the hearing on 11/07/2016. Sd/- (Joginder Singh) �या�यक सद�य /JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated : 11/07/2016 ÇAÑ? P.S //.�न.स.