ROSELIN MERCANTILE LTD,MUMBAI vs. ITO 4(3)(2), MUMBAI

All these appeals filed by the assessee are directed against the orders passed by Ld CIT(A)-8, Mumbai for assessment years 2002-03, 2003-04 and 2004-05 confirming the penalty levied u/s 271(1)(c) of the Act.

We heard the parties and perused the record. The facts are that the assessee received rental income from a cluster of tenements and declared the same under the head Income from House property. The 2 M/s. Roselin Mercantile Ltd. to 2753/Mum/2012 assessee appears to have incurred expenses for providing common amenities and the expenditure incurred thereon was deducted from the rental income at source. The assessee also paid “Cess” to Government, but claimed the same as deduction u/s 24. Both the claims were disallowed by the AO in all the three years and it was also confirmed by the Tribunal. The assessing officer levied penalty u/s 271(1)(c) of the Act for concealment of income in respect of both the disallowances referred above and the Ld CIT(A) also confirmed the same in all the three years. Aggrieved, the assessee has filed these appeals before us.

The Ld A.R placed reliance on the decision rendered by Hon’ble Supreme Court in the case of Reliance Petro Products (322 ITR 158) to contend that mere disallowance of claim made by the assessee would not amount to furnishing of inaccurate particulars of income. However, it was pointed out to the Ld A.R that the assessing officer has levied the penalty on the ground that the assessee has concealed particulars of income and accordingly the Ld A.R was asked as to whether the assessee has filed any explanation to the assessing officer during the course of penalty proceedings in terms of Explanation 1 to sec. 271(1)(c) of the Act. The Ld A.R submitted that the assessee has not concealed any particulars of income, since the AO has only rejected the claim for deduction of expenses. She further submitted that the claim so made by the assessee is supported by the decision rendered by the Tribunal in Shri Saif Ali Khan (ITA No.1653/Mum/2009) and Universal Textile Water Proof Co. (India) (2008)(20 SOT 0275). However, the Ld A.R fairly admitted that the assessee did not furnish any explanation either before the AO or before the Ld CIT(A).