The Tax Publishers2017 TaxPub(DT) 1253 (P&H-HC)

 

CIT v. Abhishek Industries Ltd.

 

INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)--Concealment or furnishing of inaccurate particularsWrong claim on the advise of the chartered accountant----Since assessee did not furnish inaccurate particulars of income with the intention to conceal income and rather it made a wrong claim on the advise of the chartered accountant, initiation of penalty for furnishing of inaccurate particulars was not justified.--Assessee on the advise of Chartered Accountant wrongly claimed deduction under section 80-IA on interest income as the interest income was 'income from other sources' and not profit 'derived from' an individual industrial undertaking. AO disallowed the said claim and levied penalty under section 271(1)(c) for furnishing inaccurate particulars of its income. Held: Even if it was assumed that the claim made by the assessee on the advise of Chartered Accountant was wrong, still it was not a good ground for imposing penalty under section 271(1)(c), as two conditions are required to be satisfied i.e. firstly there should be furnishing of inaccurate particulars and secondly, there must be concealment of income. Even if there was wrong claim, it could be denied by the AO. It could be a good case for addition but not for penalty.

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