TaxTMI 
TaxTMI 
2026 (1) TMI 680
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....of impugned orders dated 25/02/2020 till March, 2022. Consequently, one of the key persons namely, Amol Vasant Deshmukh met with serious accident and underwent surgery. Another reason for delay is due to mentioning of e-mail address of the earlier CA due to which necessary information could not reach the assessee's. Taking into all these circumstances, we observe that the delay is not intentional and assessee(s) have not gained from delay in filing the appeals. Therefore adopting a justice oriented approach and also taking guidance from the judgments of Hon'ble Apex Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. [(1987) 2 SCC 107] and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382), we hereby condone the delay of 1918 days in filing of each of the instant appeals before this Tribunal and admit these appeals for adjudication. 3. From perusal of the grounds of appeal, we notice that common grievance of the assessee's is against the levy of penalty u/s. 271(1)(c) of the Act at Rs. 18,00,580/-, Rs.18,75,645/- and Rs.14,60,970/- namely Amol Vasant Deshmukh in ITA No.1837/PUN/2025; Tulsabai Vasa....
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.... and e-filed the return of income for A.Y. 2015-16 on 31/08/2015 declaring income of Rs. 30,190/- after claiming deduction u/s. 54F at Rs. 64,01,600/- and u/s. 54B at Rs. 28,80,560/- and has shown Long Term Capital Gain (LTCG) at Rs. NIL. Case selected for limited scrutiny under CASS and valid notices u/s. 143(2) & 142(1) of the Act were served upon the assessee. Ld.AO observed that assessee has shown LTCG at Rs. 90,95,120/-, and against this income, has claimed deduction u/s. 54F & 54B of the Act and declared NIL income under capital gain. Ld.AO, further on examination of records, observed that on account of transaction of conversion of capital asset into stock-in-trade during the F.Y. 2010-11, the assessee's share of capital gain is Rs. 1,64,17,638/- and the same is required to be offered to tax in the year when consideration is received. Ld.AO further observed that out of LTCG of Rs.1,64,17,638, assessee has declared LTCG of Rs.61,98,677/- and Rs.75,04,083/- in the returns for A.Ys. 2013-14 & 2014-15 respectively. Remaining amount of LTCG is Rs. 27,14,877/- and it is eligible for deduction u/s. 54F & 54B of the Act (if any) only to the extent of Rs. 27,14,877/-. Ld.AO observed t....
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....e assessee's knowledge about the mistake, he has rectified and filed the revised computation of income and has claimed deduction u/s. 54F & 54B of the Act only to the extent of Rs.27,14,877/-. Referring to plethora of judgments filed in the legal compilation submitted that for such unintentional mistake, assessee should not be penalized with levy of penalty u/s. 271(1)(c) of the Act. Reliance was heavily placed on the judgment of Hon'ble Apex Court in the case of CIT vs. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158 (SC). Ld counsel for the assessee has also referred other decisions and CBDT instructions which are as under:- Page Sr No Particulars From To 1 Commissioner of Income Tax Vs. SAS Pharmaceuticals 1 7 2 Kamlesh Seth & Ors. Vs. ACIT 8 11 3 Greenwoods Govt. Officers Welfare Society Vs. DCIT 12 18 4 Hindustan Steel Ltd. Vs. State Of Orissa 19 23 5 Commissioner of Income-tax vs Reliance petroproducts pvt. Itd 24 28 6 ITO Vs. Ashif Mehbbobelahi Rushnaiwala 29 38 7 Vikram Kalra Vs. ACIT 39 42 8 Mrs. Villo Noshir Anklesaria vs. ACIT 43 48 ....
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....claimed excess benefit of Rs. 63,80,243/-. We further observe that the last date for revising the return of income for A.Y. 2015-16 is 31/03/2017 and prior to the expire of the said date, assessee has been served with notice u/s. 143(2) of the Act on 29/09/2016. Assessee has furnished revised computation of income and has reduced the claim of deduction u/s. 54F & 54B only to Rs.27,14,877/- and had opted for not revising the return of income during the course of assessment proceedings. 12. Now for such excess claim of deduction u/s. 54F & 54B of the Act in the income tax return at Rs.63,80,243/-, whether such mistake is liable to be visited by penalty u/s. 271(1)(c) of the Act. Here, we would like to take a note of the judgment of Hon'ble Supreme Court in the case of Reliance Petroproducts (P.) Ltd. (supra) wherein Hon'ble Court has held that "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 judgment of the Hon'ble Apex Court reads as under (relevant extract):- "2. The....
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....of opinion but nothing to do with the concealment of income or furnishing of inaccurate particulars of such income. It was claimed that mere disallowance of the claim in the assessment proceedings could not be the sole basis for levying penalty under section 271(1)(c) of the Act. It was submitted specifically that it was an investment company and in its own case for assessment year 2000-01 the Commissioner (Appeals) had deleted the disallowance of interest made by the Assessment Officer and the Tribunal has also confirmed the stand of the Commissioner (Appeals) for that year and, therefore, it was on the basis of this that the expenditure was claimed. It was further submitted that making a claim which is rejected would not make the assessee-company liable under section 271(1)(c) of the Act. It was again reiterated that there was absolutely no concealment, nor were any inaccurate particular ever submitted by the assessee-company. 6. Shri Bhattacharya, Learned ASG submits that Commissioner (Appeals), the Tribunal as well as the High Court have ignored the positive language of section 271(1)(c) of the Act. He pointed out that the claim of the interest expenditure was totally ....
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....of his income or furnished inaccurate particulars of such income." A glance at this provision would suggest that in order to be covered, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. Present is not the case of concealment of the income. That is not the case of the Revenue either. However, the learned Counsel for revenue suggested that by making incorrect claim for the expenditure on interest, the assessee has furnished inaccurate particulars of the income. As per Law Lexicon, the meaning of the word "particular" is a detail or details (in plural sense); the details of a claim, or the separate items of an account. Therefore, the word "particulars" used in the section 271(1)(c) would embrace the meaning of the details of the claim made. It is an admitted position in the present case that no information given in the Return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The lea....
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....hing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. It was further held that the assessee must be found to have failed to prove that his explanation is not only not bona fide but all the facts relating to the same and material to the computation of his income were not disclosed by him. It was then held that the explanation must be preceded by a finding as to how and in what manner, the assessee had furnished the particulars of his income. The Court ultimately went on to hold that the element of mens rea was essential. It was only on the point of mens rea that the judgment in Dilip N. Shroff's case (supra) was upset. In Dharamendra Textile Processors' case (supra), after quoting from section 271 extensively and also considering section 271(1)(c), the Court came to the conclusion that since section 271(1)(c) indicated the element of strict liability on the assessee for the concealment or for giving inaccurate particulars while filing Return, there was no necessity of mens rea. The Court went on to hold that the objective behind enactment of section 271(1)(c) read with Explanations indicated with the said section was for p....
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....re incurred by the assessee in relation to income which does not form part of the total income under the Act. It was further pointed out that the dividends from the shares did not form the part of the total income. It was, therefore, reiterated before us that the Assessing Officer had correctly reached the conclusion that since the assessee had claimed excessive deductions knowing that they are incorrect; it amounted to concealment of income. It was tried to be argued that the falsehood in accounts can take either of the two forms; (i) an item of receipt may be suppressed fraudulently; (ii) an item of expenditure may be falsely (or in an exaggerated amount) claimed, and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one's income as well as furnishing of inaccurate particulars of income. We do not agree, as 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 a....