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of <h1>Appeal allowed as penalty under Section 271(1)(c) deemed invalid. No concealment found.</h1> <h3>Jamnalal Bajaj Foundation C/o. Bajaj Auto Ltd. Versus DCIT (E) Circle-1 (1), New Delhi</h3> Jamnalal Bajaj Foundation C/o. Bajaj Auto Ltd. Versus DCIT (E) Circle-1 (1), New Delhi - TMI Issues Involved:1. Imposition of penalty under Section 271(1)(c) of the Income Tax Act.2. Validity of the notice issued under Section 274 read with Section 271(1)(c).3. Determination of whether the assessee furnished inaccurate particulars of income or concealed income.Issue-wise Detailed Analysis:1. Imposition of Penalty under Section 271(1)(c) of the Income Tax Act:The assessee appealed against the order of the CIT(A) confirming the penalty of Rs. 5,39,56,443/- imposed by the Assessing Officer under Section 271(1)(c) on the grounds of furnishing inaccurate particulars of income and concealing income. The assessee argued that the penalty was unwarranted as the revised return was filed voluntarily and not due to any notice from the AO. The assessee cited various judicial pronouncements, including the Supreme Court's decision in CIT Vs. Reliance Petro Products Pvt. Ltd., to support their claim that mere disallowance of a claim does not amount to furnishing inaccurate particulars of income.2. Validity of the Notice Issued under Section 274 read with Section 271(1)(c):The Tribunal noted that the notice issued under Section 274 read with Section 271(1)(c) did not specify the specific charge, i.e., whether the penalty was for concealment of income or furnishing inaccurate particulars of income. This lack of specificity rendered the notice invalid. The Tribunal referenced the Supreme Court's decision in M/s SSA’s Emerald Meadows and the Karnataka High Court's decision in CIT Vs. Manjunatha Cotton & Ginning Factory, which held that a notice must clearly specify the charge for which penalty proceedings are initiated. Consequently, the penalty notice was deemed null and void.3. Determination of Whether the Assessee Furnished Inaccurate Particulars of Income or Concealed Income:The Tribunal observed that the assessee had filed a revised return during the assessment proceedings, declaring an income of Rs. 18,87,107/- and paying the corresponding taxes. The revised return was filed due to the utilization of surplus accumulated under Section 11(2) for donations to other charitable trusts, attracting the provisions of Section 11(3). The Tribunal found that the assessee had disclosed all relevant facts and made a bona fide claim. The Tribunal reiterated the Supreme Court's view in Reliance Petroproducts Pvt. Ltd., which stated that merely making an unsustainable claim does not amount to furnishing inaccurate particulars of income. Since the assessee had not concealed any facts or furnished inaccurate particulars, the penalty under Section 271(1)(c) was not justified.Conclusion:The Tribunal allowed the assessee's appeal, holding that the penalty imposed under Section 271(1)(c) was not sustainable. The invalidity of the penalty notice and the absence of any concealment or furnishing of inaccurate particulars of income were key factors in this decision. The Tribunal emphasized that a mere disallowance of a claim does not justify the imposition of a penalty under Section 271(1)(c). The penalty was quashed, and the appeal was allowed in favor of the assessee.
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