Case Law Details

Case Name : Dimples Cine Advertising Pvt. Ltd. Vs ACIT Range 9(1), Mumbai (ITAT Mumbai)
Appeal Number : I.T.A. No. 5119/Mum/2010
Date of Judgement/Order : 04/04/2012
Related Assessment Year : 2002-03
Courts : All ITAT (4238) ITAT Mumbai (1416)

A glance at the provisions of section 271(1)(c) of the Income-tax Act, 1961, suggests that in order to be covered by it, 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. The meaning of the word “particulars” used in section 271(1)(c) would embrace the details of the claim made.

Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous.

Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars.

INCOME TAX APPELLATE TRIBUNAL , MUMBAI 

I.T.A. No. 5119/Mum/2010 – Assessment Year: 2002-03

Dimples Cine Advertising Pvt. Ltd.   

Vs.

ACIT Range 9(1), Mumbai 

Date of Pronouncement: 04.04.2012

 O R D E R

Per T.R. Sood (AM):

This appeal filed by the assessee is directed against the order dated 13.04.2010 of Commissioner of Income Tax (Appeals)-19, Mumbai and relates to the assessment year 2002-03.

2. In this appeal the assessee has raised various grounds, but only dispute is regarding the confirmation of levy of penalty u/s.271(1)(c) of the I.T. Act. The assessee has filed an appeal in the name of ‘Dimples Cine Advertising Pvt. Ltd.’, whereas the appellate order is in the name of ‘Dimples Leasing & Finance Ltd’. In this regard, the assessee has filed letter dated 20.03.2012 clarifying that the name of the company was changed w.e.f. 24.03.2005 and fresh certificate of incorporation consequent on the name of the change has been filed. Since, Form 36 has been filed under the new name and the learned DR has no objection if the order is passed in the new name, therefore, we accept the request to take on record the new name.

3. After hearing both the parties, we find that two additions were made consisting of a sum of Rs. 2,49,500/- on account of interest which was not offered because the same had accrued but not become payable and the sum of `.5,99,109/- consisting of set off Short Term Capital Loss against  the business income.

4. On appeal, the learned Commissioner deleted the penalty on the first addition of `.2,49,300/- because that addition had been deleted by the Tribunal in ITA No.6841/Mum/2005. However, the penalty on the second item was confirmed.

5. The learned Counsel of the assessee submitted that the assessee had sold certain vehicles which were basically trading assets which gave rise to the loss and was set off against the business income. Though the loss is not doubted, but technically loss was on the account of capital asset, but by mistake the loss was claimed against the business income. Therefore, no particulars have been concealed or wrongly furnished because in any case assessee was entitled to the loss. Under these circumstances, the penalty could not have been levied and in this regard, he relied on the decision of Hon’ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. reported in 322 ITR 158.

6. On the other hand, the learned DR strongly supported the order of the Ld. CIT(A).

7. After considering the rival submissions, we find force in the submissions of the learned counsel of the assessee because it is not disputed that the assessee is entitled to the loss but the loss has to be treated under the head “capital gain” and, therefore, it could not have been set off against the business income. Therefore, it is clear that no particulars have been concealed or wrongly furnished. The Hon’ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. Has observed as under:

“A glance at the provisions of section 271(1)(c) of the Income-tax Act, 1961, suggests that in order to be covered by it, 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. The meaning of the word “particulars” used in section 271(1)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous.

Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars.”

7.1 The ratio of the above decision is squarely applicable to the case of the assessee and accordingly we set aside the order of the CIT (Appeals) and delete the penalty.

8. In the result, the assessee’s appeal is allowed.

Order pronounced on this 4th day of April, 2012.

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Posted Under

Category : Income Tax (25041)
Type : Judiciary (9899)
Tags : ITAT Judgments (4417) section 271(1)(c) (292)

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