Penalty deleted under Section 271(1)(c) as no deliberate misrepresentation found. Appeal dismissed.

DCIT, Circle-13 (1) New Delhi Versus Jagson International Ltd.

DCIT, Circle-13 (1) New Delhi Versus Jagson International Ltd. - TMI Issues Involved:
1. Deletion of penalty under section 271(1)(c) for furnishing inaccurate particulars of income.
2. Disallowance under section 14A.
3. Disallowance on account of provision for gratuity.
4. Addition due to difference in interest as per Form 26AS.
5. Addition due to declaring short term capital gain as long term capital gain.

Detailed Analysis:

Issue 1: Deletion of Penalty under Section 271(1)(c) for Furnishing Inaccurate Particulars of Income
The appeal by the Revenue challenges the deletion of the penalty of Rs. 55,58,014/- imposed under section 271(1)(c) of the Income Tax Act, 1961, on the grounds of furnishing inaccurate particulars of income. The Ld. CIT(A) concluded that the penalty was not imposable as the assessee did not conceal any particulars or furnish inaccurate details. The Tribunal upheld this view, stating that mere disallowance or erroneous claims do not automatically result in penalty unless there is a deliberate misrepresentation of facts.

Issue 2: Disallowance under Section 14A
The assessee argued that the disallowance under section 14A was tax neutral due to the Tonnage Tax Scheme, which exempts certain income from tax. The Ld. CIT(A) and the Tribunal noted that the Hon'ble Delhi High Court had upheld that the income from shipping business under the Tonnage Tax Scheme is exempt. Therefore, any disallowance under section 14A would not affect the taxable income, and no inaccurate particulars were furnished. The Tribunal concurred with the Ld. CIT(A)'s finding that the disallowance under section 14A was not warranted.

Issue 3: Disallowance on Account of Provision for Gratuity
The Ld. CIT(A) observed that the provision for gratuity was mentioned in the tax audit report, and there was no concealment of facts. The penalty for this disallowance was deleted for AY 2012-13, and the Revenue did not appeal against that decision. The Tribunal agreed that the claim, although incorrect, did not constitute furnishing inaccurate particulars since it was disclosed in the audit report.

Issue 4: Addition Due to Difference in Interest as per Form 26AS
The difference in interest was attributed to different accounting methods used by the bank and the assessee. The Tribunal found that the deposits were correctly reflected in the books, and the discrepancy was a bona fide mistake by the accountant. Therefore, it did not amount to furnishing inaccurate particulars of income.

Issue 5: Addition Due to Declaring Short Term Capital Gain as Long Term Capital Gain
The error in declaring short term capital gain as long term capital gain was acknowledged and corrected during the assessment proceedings. The Tribunal noted that an erroneous claim does not attract penalty unless there is deliberate misrepresentation, which was not the case here.

Conclusion
The Tribunal upheld the Ld. CIT(A)'s decision to delete the penalty under section 271(1)(c), agreeing that there was no concealment or furnishing of inaccurate particulars by the assessee. The appeal by the Revenue was dismissed, and the order pronounced in the open court on 6th December, 2022.