TaxTMI 
TaxTMI 
2017 (5) TMI 970
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....e assessment order that any fact material to the computation of income was either not disclosed or was found to be wrong. The assessment has been made on the basis of facts disclosed by the appellant in the return of income and also during the course of assessment proceedings as and when demanded by the A.O. Assessment has been made by the A.O having different opinion from the point of view of the appellant. Penalty order dated 23.3.2007 has been passed by the A.O. A perusal of the penalty order reveals that the A.O. has nowhere observed that either the full facts were not disclosed or the disclosed facts were found to be wrong and that the A.O. had discovered certain facts which were concealed or whose particulars were filed inaccurate. In fact in the penalty order the AO has not discussed any default of the Appellant. A.O. has simply summarily rejected the contentions of the appellant without discussing the basis or causes of such rejection. 7.3 Sec.271(1)( c) read as under: "C) If the [Assessing} Officer or the [***} [Commissioner (Appeals) [or the Commissioner} in the course of any proceedings under this Act, is satisfied that any person - (a) ...... ....
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.... income either no explanation is offered. or explanation offered is found to be false. Appellant has offered explanation which was not found to be false and accordingly its case is not covered by Clause .(A) of Explanation 1. Clause (B) of Explanation 1 provides that where the assessee is not able to substantiate its explanation and fails to prove that such explanation is bonafide and all the {acts relating to the same have been disclosed. I find that the appellant had made disclosure first in the computation of income. Thereafter during assessment proceedings copies of agreements, judicial rulings relied upon, etc have all been disclosed. Just because appellant's explanation was not found acceptable by the A.O and CIT(A), it does not follow that that the appellant was unable to substantiate his explanation by providing various evidences and judicial opinions. I am, therefore, of the view that the assessment has been made on the basis of difference of opinion on the same set of facts which have been fully disclosed by the appellant. The case of the appellant is, therefore, not covered by Explanation 1. Based on the facts of the case, I note that the Appellant had made all the n....
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....imposition of tax thereon. In order that a penalty under section 271(1){iii) may be imposed, it has to be proved that the assessee has consciously made the concealment or furnished inaccurate particulars of his income': 7.6. The Hon'ble ITAT Mumbai Bench in the case of Roborant Investments (P) Ltd. 7 SOT 181 has held that the cases involving genuine difference of opinion on matters of law between the assessee and the AO are clearly outside the scope of Explanation 1 to Sec. 271(1)(c). The Hon'ble Supreme Court in the case of K.C. Builders, 265 ITR 562 (SC), has held that mere omission from the return of an item of receipt does neither amount to concealment nor deliberate furnishing of inaccurate particulars of income, unless and until there is some evidence to show or some circumstances found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid imposition of tax thereon. No such finding has been recorded by the AO in this case. On the contrary all facts have been disclosed by the appellant and the assessment has been made merely on difference of opinio....
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....elhi High Court has discussed the case of CIT vs. Vidyagauri Natvarlal 238 ITR 91 (Guj) and has held as under: "What is required to be considered is whether there was any enquiry that was required to be made by the Assessing Officer before concluding that the assessee had furnished inaccurate or false particulars. In this case we are of the view that no such enquiry was required to be made but there was only the need for application of the law. On the legal position, the Assessing Officer was not satisfied and did not agree with the assessee but that by itself is not a ground to invoke the penalty provision of the statute. Learned counsel for the Revenue relied upon CIT v Vidyagauri Natvarlal (1999) 238 ITR 91 (GUJ) In that case the question that arose was of unexplained cash credit, The Gujarat High Court made a distinction between a wrong claim as opposed to a false claim. in' that case, the Assessing Officer needed to make an enquiry as to whether the claim of the assessee was right or not. In so far as the present case is concerned, the decision cited by learned counsel for the Revenue is clearly distinguishable. We find that there was full disclo....
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.... wherein appeal filed by Revenue against the order of the Tribunal was dismissed by the High Court. 7. We have carefully gone through the orders of the authorities below as well as the order of the Tribunal dated 08/05/2015 wherein similar penalty imposed was deleted by CIT(A) and the order of CIT(A) was confirmed by the Tribunal after having the following observation:- 7. We have considered rival contentions and carefully perused the record. We have also gone through the order of the Tribunal in assessee's own case for the assessment years 1989-90 & 1990-91. The relevant observation of the Tribunal in this regard are as under :- 6. Rival contentions heard. On a careful consideration of the facts and circumstances of the case and on a perusal of the papers on record and the orders of the authorities below as well as the case law cited, we hold as follows. 7. The assessee has furnished full particulars in his return of income. In fact, in the notes to the return of income, the claim has been made amply clear. The very fact that the issue has been referred to a Special Bench for adjudication, demonstrates that it is a debatable legal issue. The claim....
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....n this case, there I no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under s. 271(1)(c). 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 assessee. Such claim made in the return cannot amount to the inaccurate particulars. The assessee had furnished all the details of its expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not attract the penalty under s. 271(1)(c). If the contention of the Revenue is accepted then in case of every return where the claim made is not accepted by the AO for any reason, the assessee will invite penalty under s. 271(1)(c). That is clearly not the intendment of the legislature. The ....