High Court affirms Tribunal's decision to delete penalty under Income Tax Act. No concealment of income found. Appeal dismissed.

The High Court upheld the Tribunal's decision to delete the penalty imposed under Section 271(1)(c) of the Income Tax Act. The Court emphasized that the claim made by the assessee, though incorrect, did not amount to furnishing inaccurate particulars with the intention to conceal income. The Court dismissed the appeal by the appellant-revenue, stating that no substantial question of law arose from the Tribunal's findings.

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Issues:
1. Justification of deleting penalty under Section 271(1)(c) of the Income Tax Act, 1961.
2. Whether the assessee furnished inaccurate particulars of income by claiming wrong deduction under Section 80IA of the Act on interest income.

Issue 1:
The appellant-revenue filed an appeal under Section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal (ITAT) deleting the penalty imposed under Section 271(1)(c) of the Act. The Assessing Officer had imposed a penalty of Rs. 47,77,500 for furnishing inaccurate particulars of income. The CIT(A) and the Tribunal both deleted the penalty. The Tribunal found that the claim made by the assessee for deduction under Section 80IA on interest income was wrong, but it was not a ground for imposing a penalty as there was no intention to conceal income. The Tribunal concluded that the assessee did not furnish inaccurate particulars with the intention to conceal income, rather the claim was made based on advice from a Chartered Accountant. The Tribunal upheld the decision of the CIT(A) in deleting the penalty, stating that even if the claim was wrong, it could be a case for addition but not for penalty.

Issue 2:
The assessee had claimed deduction under Section 80IA of the Act on interest income, which was disallowed by the Assessing Officer as the interest income was not profit derived from an industrial undertaking. The Assessing Officer levied a penalty under Section 271(1)(c) for furnishing inaccurate particulars of income. However, the Tribunal found that the claim made by the assessee based on advice from a Chartered Accountant, though incorrect, did not amount to furnishing inaccurate particulars with the intent to conceal income. The Tribunal referred to judicial pronouncements and held that the claim made by the assessee, even if wrong, did not attract a penalty under Section 271(1)(c) as there was no concealment of income. The Tribunal's decision was supported by relevant case laws and legal principles, including the interpretation of "particulars" under the Income Tax Act.

In conclusion, the High Court upheld the Tribunal's decision to delete the penalty imposed under Section 271(1)(c) of the Income Tax Act, emphasizing that the claim made by the assessee, though incorrect, did not amount to furnishing inaccurate particulars with the intention to conceal income. The Court dismissed the appeal by the appellant-revenue, stating that no substantial question of law arose from the Tribunal's findings.

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