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Case Law Details

Case Name : Khanpur Vibhag Madhyamik Shala Karmchari Dhiran & Grahak Sahakari Mandali Limited Vs ACIT (ITAT Ahmedabad)
Appeal Number : ITA No.555/Ahd/2022
Date of Judgement/Order : 17/05/2023
Related Assessment Year : 2015-16
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Khanpur Vibhag Madhyamik Shala Karmchari Dhiran & Grahak Sahakari Mandali Limited Vs ACIT (ITAT Ahmedabad)

The Income Tax Appellate Tribunal (ITAT) in Ahmedabad has given a ruling favoring the assessee, an employee cooperative credit society. The ITAT stated that the penalty under section 271(1)(c) cannot be levied when no inaccurate particulars of income have been furnished by the assessee. The case in question was between Khanpur Vibhag Madhyamik Shala Karmchari Dhiran & Grahak Sahakari Mandali Limited Vs ACIT.

Analysis: The case centers on the assessee’s belief that the interest income earned on bank deposits also falls under the claim for deduction under Section 80P of the Income Tax Act. As per the Assessing Officer, there was no instance where the assessee has furnished inaccurate particulars of income. This led the ITAT to the decision that the penalty under section 271(1)(c) for providing inaccurate particulars of income is not applicable in this case. The Tribunal, however, dismissed the assessee’s additional argument on the validity of the order under Section 271(1)(c) due to the lack of a Document Identification Number.

Conclusion: The ruling underlines the necessity for the Revenue to clearly establish the furnishing of inaccurate particulars for a penalty under section 271(1)(c) to be applicable. In the absence of any such proof, as in this case, the ITAT held that the penalty provision cannot be triggered. This verdict is significant as it sets a precedent for similar cases and brings clarity on the circumstances under which the penalty under section 271(1)(c) can be imposed.

FULL TEXT OF THE ORDER OF ITAT AHMEDABAD

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