2022 (1) TMI 1093

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....as erred in deleting the penalty of Rs. 59,00,884/- levied u/s. 271(1)(c) of the Act holding that the AO was not able to prove that is a fit case for imposition of penalty either under the main part of section u/s. 271(1)(c) or under the deeming provisions of explanation 1 to section 271(1)(c) of the Act. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the penalty without appreciating the fact that the assessee has availed higher claim of deduction u/s. 36(1)(viia) in the computation of income than as admissible under the income tax act and when the onus of proving 'mens-rea' is not on the department/AO. Ignoring the decision of Hon'ble Supreme Court in the case of K.P. Madhusu....

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....e Tax Recovery Officer, Satara ('the Assessing Officer') vide order dated 29.12.2011 passed u/s. 143(3) of the Income Tax Act, 1961 ('the Act') at a total income of Rs. 6,29,04,510/-. While doing so, the Assessing Officer made several disallowances. One of such disallowance relates to the disallowance of Rs. 1,96,69,614/- u/s. 36(1)(viia) of the Act, the Assessing Officer allowed the claim for deduction u/s. 36(1)(viia) to the extent of provision actually created of Rs. 45,00,000/- as against total claim of deduction of Rs. 2,41,69,614/- and the balance of Rs. 1,96,69,614/- was disallowed as no provision was created in the books of account. 4. Being aggrieved by the above disallowance, an appeal was filed before the ld. C....

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....ival submissions and perused the material on record. The issue in the present appeal relates to the levy of penalty u/s. 271(1)(c) of the Act. The Assessing Officer disallowed the excess claim of deduction u/s. 36(1)(viia) on the ground that the assessee had not created the requisite provision and levied penalty u/s. 271(1)(c) by holding that the respondent-assessee is guilty of furnishing of inaccurate particulars of income. On perusal of the assessment order, it will clearly suggest that, it is a case of mere disallowance of excess claim for want of creation of requisite provision which, in our considered opinion, does not tantamount to furnishing inaccurate particulars of income, nor can it be said that it is false claim. Therefore, the ....