TaxTMI 
TaxTMI 
2022 (7) TMI 1149
X X X X Extracts X X X X
X X X X Extracts X X X X
....e grounds of appeal raised by the Revenue read as under :- "Whether on the facts and in the circumstances of the case the Ld. CIT (A) has erred in deleting the penalty of Rs.94,17,160/- imposed by the AO u/s 271(1)(c) of the Act when the assessee did not file appeal before the Ld. CIT (A) against the disallowances made by in assessment order passed u/s 143(3) and willfully accepted the order of the AO." 3. The assessee has taken the following grounds in the cross objections :- "Under the facts and circumstances of the case, the penalty order was erroneous as the Ld. Assessing Officer has nowhere recorded the satisfaction in penalty notice whether penalty is leviable by virtue of concealment of particulars of income or by virtue of fur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts are subject to audit and the appellant has followed Accounting Standard (AS)-2 issued by ICAI according which selling and distribution costs are not to be included as part of cost of inventories. It was also argued that addition made by AO is revenue neutral and doesn't involve any concealment. Treating certain items of expenses as capital, particularly when the same is reflected in audited financial statements and when the guidelines as contained in AS-2 is being followed, it was submitted, at maximum can be viewed as a debatable issue for which no penalty can be imposed. 6. Considering the above, ld. CIT (A) deleted the penalty holding that mere disallowance of a claim will not amount to furnishing of inaccurate particulars of inc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T vs. Reliance Petroproducts Pvt. Ltd. [2010] 189 taxmann 322 (SC) has observed that when all details were disclosed in its return and the AO gathered information from such return, it can at the highest be said that the claim of the assessee was not sustainable in law but there is no furnishing of inaccurate particulars or concealment of income. Mere non-acceptance of claim of assessee does not justify imposition of penalty u/s 271(1)(c). 6.10 Further, imposition of penalty is not automatic and therefore non-filing of appeal against the addition before CIT(A) is not a relevant issue. 6.11 Thus, in view of above discussion, I am of considered view that order levying penalty amounting to Rs.94,17,160/- in this case deserves to be cancel....