2013 (12) TMI 1418

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....at Meerut in Income Tax Appeal No. 4285/Del/2007 for Assessment Year 2003-04. 3. The appeal was preferred on the ground that the Tribunal erred in law in deleting the penalty of Rs.9,87,719/- imposed under Section 217 (1) (c) of the Act and further that the Tribunal erred in holding that the assessee had made full disclosure of its concealed income even though a notice had been issued to the assessee before it filed a letter offering its undisclosed income to tax. 4. The Tribunal, affirming the order of the CIT (Appeals) and directing the AO to cancel the penalty of Rs.9,87,719/-, held as follows:- "We have heard both the parties and carefully considered the rival submissions with reference to facts, evidence and material placed on....

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....ection 50 C of the IT Act and offered the capital gains for taxation. Since the assessee in its original return has not offered this amount for taxation, the AO initiated penalty proceedings u/s 271 (1) (c) of the Act. The assessee did not produce the sale deed. He however, on the enquires made by the AO, submitted the value of the land at Rs.23,60,190/- as per circle rate of the land in the financial year 1993-94. The AO took the cost of acquisition at Rs.23,60,190 and after indexation of cost at Rs.43,23,790/-, the long term capital gain was worked at Rs.10,74,210/-. 6. In Commissioner of Income Tax, Ahmedabad Vs. Reliance Petro-products Private Ltd [2010 (11) SCC 762], the Apex Court revisited the conditionalities of levying penalty u....

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....lly incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. 11. The Learned Counsel argued that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income". We do not think that such can be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. In Commissioner of Income Tax, Delhi Vs. Atul Mohan Bindal [2009(9) SCC 589], where this C....