2017 (8) TMI 483

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....13 passed u/s 271(1)(c) of the Income-tax Act, 1961 (for short 'the Act'), qua the assessment year 2010-11 on the grounds inter alia that :- "1. On the facts and in the circumstances of the case the ld. CIT(A) has grossly erred in confirming the penalty of Rs. 181800 imposed u/s 271(1)(c) by the A.O. for A.Y. 2010-11. 2. That the penalty is base on disallowance of Professional and Management expenses and penalty for disallowance of expenses per se cannot lead to concealment. 3. That the A.O. has grossly failed in recording justification for initiation and finalization of penalty proceedings. 4. That the bonafide explanation offered by the 'A' [(as per explanation to section 271(1)] has wrongly bei....

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.... the business of the share market and moreover, there was no other transaction in the bank account of Ms. Divya Khanna other than an amount of Rs. 6,00,000/- debited by the assessee under the head professional fees. Consequently, the AO sought to initiate penalty proceedings u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income. 4. During the penalty proceedings, the AO came to the conclusion that the assessee has debited inadmissible expenses and thereby furnished inaccurate particulars of income in respect of addition / disallowance and thereby imposed penalty to the tune of Rs. 1,81,800/- @ 100% of the tax sought to be paid by the assessee. 5. Assessee challenged the penalty order by way of an appeal before the l....

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....ing inadmissible expenses on account of making commission payment of Rs. 6,00,000/- to Ms. Divya Khanna for providing tips for purchasing shares?" 9. Operative part of the penalty order imposing penalty of Rs. 1,81,800/- on the assessee is reproduced as under for ready reference :- " In view of this it is clear that assessee has debited inadmissible expenses and thereby furnished inaccurate particulars of its income in respect of the addition/disallowance as discussed above and accordingly, it is found to be a fit case for imposition of penalty u/s 271(1)(c) of the Act r.w. Explanations thereto. Moreover, inspite of giving two opportunities vide penalty notices u/s. 274 read with section 271(1)(c) of the Income Tax Act, 1961 was....

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....im made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate....