2015 (3) TMI 1131

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.... levied u/s.271(1)(c) without appreciating the fact that assessee has furnished inaccurate particulars of income by not making any disallowance u/s.14A r.w.Rule 8D, which is fully applicable in the instant case? 2. The appellant prays that the order of Ld.CIT(A) be set aside and the order of the AO be restored." 2. Rival contentions have been heard and record perused. From the record, we found that the AO has made an addition of Rs. 16,47,637/- u/s.14A r.w.Rule 8D of the I.T.Act Penalty proceedings u/s.271(1)(c) of the IT Act was also initiated at the time of assessment. During penalty proceedings, it was contended by the assessee that penalty u/s.271(1)(c) is not leviable on the disallowance made by the AO where additions has been made d....

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....t does not mention about any specific expenditure which can be directly linked with the earning of exempt income. Therefore, under these circumstances, it cannot be held that either the appellant has furnished any inaccurate particulars of its income expenditure or the appellant has concealed its income. The addition made by the A.O. is on account of a disallowance u/s.14A primarily due to the fact that the opinion of the A.O. is different then the explanation of the appellant. In such a scenario, in view of the decision of Hon'ble Apex Court in the case of M/s Reliance Petro Products (Supra.), the penalty ujs.271(1)(c) of the I.T.Act,1961 is not justified hence the same is deleted." 4. The contention of the assessee before the AO was ....