Brief of the case:
The ITAT Chennai in the case of DCIT vs. M/s. Rattha Citadines held that relying on the same information as available on the date of filing original return of income in filling revised return but making a different claim , in the absence of assessee’s bonafide expenditure would be deemed as furnishing of inaccurate particulars of income making assessee liable to face penalty u/s 271(1)(c).
Facts of the case:
- The assessee filed the return of income on 14-10-2010 declaring Nil income which was revised subsequently on 18-03-2011 declaring a loss of Rs. 1,23,51,488/- after adjusting the notional income of C4,76,517/- computed on account of restatement of foreign currency loan liability. During the course of assessment the said loss claim made in the revised return was disallowed by the AO and assessed the income of Rs. 4,76,517/-.
- AO relied upon the order of the Hon’ble Apex Court in the case of Tuticorin Alkali & Chemicals Fertilizers Limited vs. CIT reported and arrived at the said conclusion on the reason that the assessee has not commenced any business activity during the year under consideration.
- AO also initiated penalty proceedings under Section 274 read with Section 271(1)(c) and after getting response of the assessee levied penalty of Rs. 39,63,854/- which was 100% of the tax sought to be evaded on the expenditure claimed by the assessee in the revised return.
- CIT(A) placing reliance on the order of the Supreme Court in the case of CIT vs. Reliance Petro Products Pvt. Ltd 322 ITR 158 (SC), deleted the penalty. Aggrieved by the said order , revenue is in appeal before ITAT.
Contention of the Assessee:
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