DCIT Vs Bank of India (ITAT Mumbai)
Mumbai ITAT: Penalty Invalid Where Notice Alleged Inaccurate Particulars but Order Found Concealment
The AO levied penalty under section 271(1)(c) concerning additions relating to section 14A, amortisation of lease premium, foreign branch income, bad debts and provision for country risk. The CIT(A) cancelled the penalty both on jurisdictional grounds and on merits.
The Mumbai ITAT upheld the deletion, noting that the show-cause notice initiated penalty for furnishing inaccurate particulars of income, whereas the final penalty order imposed it for concealment of income. This mismatch reflected uncertainty regarding the precise charge and rendered the penalty unsustainable, following the Bombay High Court decisions in Samson Perinchery and Mohd. Farhan A. Shaikh.
On merits, the Tribunal noted that the section 14A disallowance and bad-debt addition had already been deleted in the quantum appeal, while the country-risk provision had been restored to the AO. Penalty could not survive where the underlying additions had been deleted or were pending fresh adjudication.
The remaining issues concerning amortisation of lease premium and exclusion of foreign branch income were debatable legal questions on which the High Court had admitted substantial questions of law. A claim involving a genuine legal controversy, with all relevant facts disclosed, cannot amount to concealment or furnishing inaccurate particulars merely because it was not accepted.
