2013 (9) TMI 735

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....unal, the order imposing penalty, under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the "Act"), has been wrongly set aside by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal, by relying upon a judgment of the Hon'ble Supreme Court in Commissioner of Income Tax (Appeals) versus Reliance Petro Products Private Limited 322 ITR 158 (Supreme Court). The judgment is not applicable as it is distinguishable on facts. The controversy, in the present case, is fully covered against the assessee by a judgment of the Delhi High Court in Commissioner of Income Tax versus Zoom Communication Private Limited, 2010 (327) ITR 510 (Delhi). The Income Tax Appellate Tribunal as well as the Commissioner....

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....ty. Aggrieved by this order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), which was allowed by holding as follows:- "In the case of the appellant the deduction u/s 80IB was rejected by the AO for late filing of return. The various contentions raised by the appellant were rejected. The Hon'ble ITAT, Amritsar has upheld the disallowance for deduction u/s 80IB, but it is now judicially well settled that a finding in the assessment order may constitute good evidence in the penalty proceedings but such finding cannot be regarded as conclusive for the purpose of penalty and raising a legal claim, even if it is ultimately found to be legally unacceptable does amount to furnishing of inaccurate particulars of incom....

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....ied upon by the appellant's counsel and reproduced supra are also relevant to conclude that an erroneous claim of deduction made by appellant may be a good case for making addition since claim was erroneous but that by itself is not sufficient for levy of penalty u/s 271(1) (c). "The Hon'ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd., reported in 352 ITR 158 (SC) has held" that a mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the appellant. If this contention is accepted then in case of every return where the claim made is not accepted by the AO for any reason, the appellant will invite penalty u/s 271(1)(c). That is clea....

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....gument advanced by learned counsel for the assessee before us as well as advanced before learned first Appellate Authority are very much relevant on the facts and circumstances of the present case. Keeping in view of the facts and circumstances of the present case and the impugned order passed by learned first Appellate Authority on the basis of decision of Hon'ble Supreme Court of India in CIT Vs. Reliance Petro Products Pvt. Ltd reported in 322 IIP 158 (Supreme Court), we are of the view that no interference is required in the well reasoned order passed by the learned First Appellate Authority, therefore, we uphold the same by dismissing the appeals filed by the Revenue." Counsel for the revenue's contention that as claim for deduction ....