TaxTMI 
TaxTMI 
2013 (2) TMI 753
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....T(A)-XII, New Delhi dated 26.09.2011, 14.09.2005 and 13.09.2012 for AY 2001-02, 2002-03 & 2003-04. 2. In all these appeals, the Revenue has challenged the cancellation of levy of penalty imposed under Section 271(1)(c) of the Income-tax Act, 1961. 3. The facts of the case are that in AY 2001-02 and 2002-03, the Assessing Officer disallowed the payment of royalty on the ground that tax was not deducted at source under Section 40(a)(i) of the IT Act. In AY 2003-04, 75% of the royalty was disallowed by the Assessing Officer following the decision of Hon'ble Apex Court in the case of Southern Switch Gear Ltd. Vs. CIT and Another - (1998) 232 ITR 359 (SC). The Assessing Officer also levied the penalty under Section 271(1)(c) in all the three y....
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....CIT Vs. Reliance Petroproducts Pvt.Ltd. - (2010) 322 ITR 158 (SC), wherein their Lordships 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 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars." 7. Thus, merely because the assessee made a claim of royalty which, in the opinion of the Assessing Officer, is disallowable either in full or in part, would be no ground for levy of penalty un....
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....ssued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year." 10. Thus, as per the proviso to Section 147, when original assessment is completed under Section 143(3), reassessment beyond four years can be made only if there is failure on the part of the assessee to disclose fully and truly all material facts. Admittedly, in this case, original assessment was completed under Section 143(3) and assessment was reopened beyond the period of four years from the end of the relevant assessment year. Therefore, it needs to be examined whether there was any failure on the part of the assessee to disclose any material fact. The reason for reopening....
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....ein it was held as under:- "…..In order to initiate proceedings for reassessment after four years, there should have been a failure on the part of the assessee to disclose material facts necessary for assessment. If the Assessing Officer had failed to apply legal provisions/section of the Income-tax Act, 1961, the fault cannot be attributed to the assessee. The requirement is that the assessee should have failed or omitted to make full and true disclosure of material facts. The assessee is not required to disclose, state or explain the law….." (ii) BLB Limited Vs. ACIT - (2012) 343 ITR 129 (Delhi), wherein it was held as under:- "…….Held, allowing the petition, that the assessee had disclosed fully and truly....