TaxTMI 
TaxTMI 
2012 (8) TMI 514
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....auditors in the audit report in Form 10 B and, therefore, there was neither concealment nor furnishing of inaccurate particulars. 2. Whether in the facts and circumstances and in law the CIT(A) was right in holding that there was no concealment of income by furnishing of inaccurate particulars and deleting the penalty levied u/s. 271(1)(c) of the I.T. Act when the assessee APMC Manchar, violated the provision u/s 13(1)(c ) by letting-out shops on long lease to the relatives of Directors who are the persons as referred to u/s 13(3) of the Act, and claimed exemption u/s 11 of the Act". 3. The facts relevant to the issue reveal from record are as under. The assessee is constituted under Maharashtra Agricultural Produce Marketing and R....
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.... and their relatives, who were interested persons within the meaning of Sec. 13(3) r.w.s. 13(1) (c) and hence, the provisions of Sec. 13(2) were violated and assessee was not entitled to exemption of its income u/s.11 of the Act. The A.O. initiated penalty proceedings u/s. 271(1)(c ) of the Act and levied the penalty of Rs. 5,96,251/-. The assessee challenged the penalty levied by the A.O before the CIT(A). The Ld CIT(A) deleted the penalty relying on the decision in the case of CIT Vs. Reliance Petroproduct P. Ltd., 322 ITR 158 (SC) as well as Kanbay Software Vs.DCIT, 122 TTJ 721 (Pune), the operative part of the order of the Ld CIT(A) is as under : "9. The legal position with regard to Section 271(1)(c ) as it presently stands is made ....
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....ance Petroleum Products Ltd (2010) 322 ITR 158 (SC), the Hon'ble Supreme Court held as below: "In Webster's Dictionary, the word "inaccurate" has been defined as :- "not accurate, not exact or correct; not according to truth; erroneous; as on inaccurate statement, copy or transcript". We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the Return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false. Such not being ....
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....lotted when they were not directors. 13. As mentioned by the AO himself, it is from these facts mentioned in the audit report filed by the assessee that the possible violation of Section 13, in fact, came to the AO's notice. Considering this fact, and in the light of the legal position explained in the above cases, I am of the considered view that the appellant cannot be said to have either concealed or furnished inaccurate particulars of its income, and even the provisions of Explanation-1 to Section 271(1)(c ) are not attracted since there was no concealment or furnishing of inaccurate particulars with regard to factual aspects which had clearly been disclosed by the appellant." 4. Now, the revenue is in appeal before us. 5. We h....