Furnishing inaccurate particulars: penalty sustained where exemption claim rested on an unproved iqrarnama and unsupported facts.

Penalty under section 271(1)(c) was upheld because the assessee's section 54 exemption claim rested on an unregistered iqrarnama whose genuineness was not proved. The seller was not produced, the alleged cash transaction was unsupported, and the document was later cancelled. The earlier quantum finding had already recorded that the iqrarnama was unauthenticated and that there was no material to show possession of the residential house so as to attract section 53A of the Transfer of Property Act, 1882. On these facts, the claim was treated as a false claim with inaccurate particulars, and Reliance Petroproducts was held inapplicable.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable where the assessee claimed exemption under section 54 on the basis of an iqrarnama whose genuineness and supporting facts were not established.

Analysis: The assessee's claim for exemption under section 54 was founded on an unregistered iqrarnama, the seller was not produced, the alleged transaction was in cash, and the document was cancelled later. The earlier quantum finding had already held that the authenticity of the iqrarnama was not proved and that there was no material to show that possession of the residential house had been taken so as to attract section 53A of the Transfer of Property Act, 1882. On those facts, the claim was not a mere unsustainable claim but a false claim unsupported by evidence. The decision in Reliance Petroproducts was held inapplicable because the case involved absence of substantiation and inaccuracy in the particulars furnished, not merely a rejected legal claim.

Conclusion: Penalty under section 271(1)(c) was rightly sustained; the assessee was liable for furnishing inaccurate particulars of income.

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