Case Law Details
Amit Capital & Securities (P) Ltd. Vs ITO (ITAT Mumbai)
Conclusion: Merely because assessee’s had claimed administrative expenditure which was not acceptable to Revenue, that by itself would not attract penalty under Section 271(1)(c) if there was absence of concealment and / or furnishing of inaccurate particulars of income.
Held: Assessee was a share trading and investment company. AO determined the total income by treating capital gains as business income and it appeared that assessee had claimed all administrative expenses as deduction against long term capital gain which was rejected by him. He also leived penalty u/s 271(1)(c) for wrong claim of expenditure. Assessee had challenged penalty order passed by AO under section 271(1)(c) on the ground that AO had issued vague notice without striking off inappropriate portion in the notice whether penalty had been levied for concealment of particulars of income or furnishing of inaccurate particulars of income, therefore, penalty levied on such vague notice could not survive. It was a settled position of law that mere rejection of claim, made by assessee, would not ipso-facto, result in penalty imposed under section 271(1)(c) as was held also in CIT vs Reliance Petro Products Pvt. Ltd. (2010)(11) SCC 762(Supreme Court). Before penalty could be imposed under Section 271(1)(c), Revenue in terms thereof must be satisfied that assessee had concealed particulars of income or furnished inaccurate particulars of his income. In case, where an assessee makes a complete disclosure of facts it then could not be said to have concealed the particulars of income or furnished inaccurate particulars of income. Thus, mere making a claim for benefit under a particular provision of law would not attract penalty under Section 271(1)(c) of the Act if there was absence of concealment and / or furnishing of inaccurate particulars of income. Thus, the penalty imposed under section 271(1)(c) was directed to be deleted.
FULL TEXT OF THE ITAT JUDGEMENT
The assessee is aggrieved by the impugned order dated 08/02/2017 of the First Appellate Authority, Mumbai, confirming the penalty of Rs.4,30,000/-, imposed under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter the Act) and further holding that the assessee while claiming deduction of administrative expenses to the extent of Rs.13,99,521/- did not furnish any evidence.
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