Appeal allowed, penalty deleted under section 271(1)(c) due to absence of deliberate intent.

The Tribunal allowed the appeal, directing the Assessing Officer to delete the penalty under section 271(1)(c). The decision was based on the absence of deliberate intent to furnish inaccurate particulars and the lack of immediate tax benefit to the assessee due to the loss in the return of income.

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Issues:
1. Assessment of penalty under section 271(1)(c) for furnishing inaccurate particulars of income.

Detailed Analysis:

Issue 1: Assessment of penalty under section 271(1)(c) for furnishing inaccurate particulars of income.

The appeal was filed against the order of the Commissioner of Income Tax (Appeals) upholding the penalty of Rs. 45,71,700 levied under section 271(1)(c) by the Assessing Officer (AO). The primary contention of the assessee was that the penalty was illegal, unlawful, and against natural justice. The key issue raised by the assessee was the confirmation of the penalty by the CIT(A) for furnishing inaccurate particulars of income.

The assessee, a limited company engaged in manufacturing, declared a total loss in the return of income. However, the AO disallowed the deduction claimed for interest expenses payable to banks under section 43B(e) of the Income Tax Act, as the interest was not paid before the due date. Subsequently, a penalty under section 271(1)(c) was imposed for furnishing inaccurate particulars of income.

The assessee contended that the interest expenses were claimed in good faith, believing they were allowable deductions. The AO, however, considered the assessee's actions as mala-fide and imposed the penalty. The CIT(A) upheld the AO's decision, stating that if not selected for scrutiny, the assessee's income would have been tax-free.

Upon review, the Tribunal noted that the assessee had disclosed the default in repayment of interest in its financial statements. The CA also admitted the mistake in not making the disallowance in the tax audit report. Relying on the Supreme Court judgment in Price Waterhouse Coopers Pvt. Ltd. vs CIT, the Tribunal found no deliberate intention to furnish inaccurate particulars and reversed the penalty. The Tribunal emphasized that the inadvertent error did not amount to concealment of income.

In conclusion, the Tribunal allowed the appeal, directing the AO to delete the penalty under section 271(1)(c). The decision was based on the absence of deliberate intent to furnish inaccurate particulars and the lack of immediate tax benefit to the assessee due to the loss in the return of income.

This detailed analysis covers the primary issue of the assessment of penalty under section 271(1)(c) for furnishing inaccurate particulars of income, outlining the arguments, findings, and the final decision of the Tribunal.

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