2013 (7) TMI 81

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....es and perused the material placed before us. We find that the penalty under Section 271(1)(c) was levied in respect of disallowances under Section 43B for unpaid liability of sales tax, provident funds etc. After considering the arguments of both the sides and the facts of the case, in our opinion, the issue under consideration is covered in favour of the assessee by the following two decisions of Hon'ble Apex Court:- (i) CIT Vs. Reliance Petroproducts Pvt.Ltd. - [2010] 322 ITR 158 (SC), wherein their Lordships of the Apex Court held as under:- "Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 27....

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....sessee was guilty of either furnishing inaccurate particulars or attempting to conceal its income. On the peculiar facts of this case, the imposition of penalty on the assessee was not justified." 4. We have also noted that learned CIT(A) held that on these facts, the decision of Reliance Petroproducts Pvt.Ltd. (supra) would not be applicable but, on the other hand, the decision of Hon'ble Jurisdictional High Court in the case of CIT Vs. Zoom Communication Pvt.Ltd. - [2010] 327 ITR 510 (Del) would be applicable. In the case of Zoom Communication Pvt.Ltd. (supra), their Lordships of the Jurisdictional High Court considered the decision of Hon'ble Apex Court in the case of Reliance Petroproducts Pvt.Ltd. (supra) and held as under:- "In ....

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....is and the explanation furnished by him for making such a claim is not found to be bona fide, it would be difficult to say that he would still not be liable to penalty under section 271(1)(c) of the Act. If we take the view that a claim which is wholly untenable in law and has absolutely no foundation on which it could be made, the assessee would not be liable to imposition of penalty, even if he was not acting bona fide while making a claim of this nature, that would give a licence to unscrupulous assessees to make wholly untenable and unsustainable claims without there being any basis for making them, in the hope that their return would not be picked up for scrutiny and they would be assessed on the basis of self-assessment under section ....