Case Law Details
Brief of the case:
ITAT held in Pooja Industries Vs ITO that penalty u/s 271(1)(c) could not be levied only because that the assessee had wrongly claimed deduction u/s 80IC @ 100% instead of deduction u/s 80IB. Penalty could only be levied only and only if there were inaccurate particulars of the income and there were concealment of particulars of income of the assessee. Making an incorrect claim would not tantamount to furnishing inaccurate particulars. So penalty us 271(1)(C) could not be levied.
Facts of the case:
The assessee had filed its return of income after claiming deduction u/s 80IC @ 100% for the expansion of roller flour mills but AO was of the view that the assessee was not eligible for deduction u/s 80IC but under 80IB @ 25% because it was not a roller flour mill but only a flour mill. So AO had levied penalty u/s 271(1)(c) for inaccurate furnishing of particulars which assessee denied and went into appeal.
Contention of the assessee:
Assessee was of the view that as it had made expansion of flour mills So deduction u/s 80IC @ 100% should be allowed to the assessee. Moreover assessee was running roller flour mill not flour mills so deduction u/s 80IC instead of 80IB should be allowed.
Further assessee was of the view that though deduction u/s 80IB @ 25 % was confirmed by the department and it was acceptable to the assessee but it had disclosed all the facts of the case and had not hide any particulars of the income for which penalty for the concealment of income should be levied u/s 271(1)(C). Assessee relied upon the decision given by Supreme Court in the case of CIT Vs. Reliance Petro Products Pvt. Ltd. , 322 ITR 158 that penalty for concealment of income could not be levied for incorrect claim of law. So penalty u/s 271(1)(c) should not be levied.
Contention of the revenue:
Revenue was of the view that assessee had twisted facts to evade taxes by claiming deduction u/s 80IC by claiming it to be roller flour mill instead of flour mill. The Further the case law relied upon by the assessee was not applicable in the above case because as per the decision given by Supreme Court in the case of CIT Vs. Reliance Petro Products Pvt. Ltd. , 322 ITR 158 that penalty could not be levied for incorrect claim of law but in the above case there was incorrect claim of facts as assessee had claimed deduction u/s 80IC instead of 80IB because it was considering itself to be roller flour mill but AO was considering assessee to be flour mill, so penalty u/s 271(1)(C) should be levied for incorrect claim of facts.
Held by ITAT:
ITAT held that for levying penalty us 271(1)(C) there had to be inaccurate particulars of the income of the assessee and the and there should be concealment of particulars of income of assessee. But in the above case there was no information given by assessee which was found to be false. Assessee had made only wrong claim of deduction from 80IC instead of 80IB so making an incorrect claim would not tantamount to furnishing inaccurate particulars.
Moreover Assessee had not concealed any particulars related with the income. So penalty could not be levied u/s 271(1)(c).
Appeal of the assessee was allowed.
