When income tax officer should not impose penalty on assessee ?

[bpagrawal]

When income tax officer should not impose penalty on assessee ?
SUBMITTED BY; PRAKASH JOTWANI

In the case of Reliance Petroproducts Ltd., (supra), the Hon'ble
Supreme Court held that in order to be covered by the provisions of section
271(1)(c), there has to be concealment of particulars of income by the
assessee or furnishing of in-accurate particulars of his income. Explaining
further, the Hon'ble Supreme Court observed that when no information given
in the return is found to be in-correct or in-accurate, the assessee cannot be
held guilty of furnishing in-accurate particulars of its income and unless the
case is strictly covered by the provision, the penalty cannot be imposed. It is
further held that where there is no finding that the particulars furnished by
the assessee in its return are in-accurate or erroneous or false, there is no

question of imposing penalty u/s 271(1)(c) of the act merely because the claim
of the assessee for deduction is disallowed in the quantum proceedings.
Keeping in view the ratio of the decision of Hon'ble Supreme Court in the case
of Reliance Petroproducts Ltd. (supra) and having regard to all the facts of the
case as discussed above, we are of the view that the present case is not a fit
case to impose penalty u/s 271(1)(c) of the Act and the ld. CIT(A) is not
justified in confirming the penalties imposed by the A.O. for both the years
under consideration.


IN THE INCOME TAX APPELLATE TRIBUNAL "E"
BENCH,
MUMBAI
BEFORE S/SHRI H.L. KARWA, HON'BLE PRESIDENT AND P.M. JAGTAP, AM
I.T.A. No.2559 /Mum/2013

Assessment Year : 2003-2004

Salman Khan,

3, Galaxy Apts.,
Vs.
B.J. Road, Band Stand,
Bandra (W),
Mumbai – 400 050.


Date of Pronouncement : 30-7-2014
O R D E R
PER BENCH.
http://www.lawweb.in/2014/08/when-income-tax-officer-should-not.html