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Penalty u/s 271(1)(c)

Started by murali Krishnamurthy, October 06, 2010, 09:20:16 AM

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murali Krishnamurthy

 The assessee filed original return of income, in time, and claimed deduction u/s 80-IA of the Act on the presumption that the project will be completed as per schedule. However, owing to recession, the project could not be completed and therefore, the assessee filed a revised return of income within  year withdrawing the claim.

The assessment was completed after verifying the books of account. The AO initiated penalty proceedings and levied penalty for "furnishing inaccurate particulars" of income. Aggrieved against the penalty, the assessee has preferred an appeal.

Is the action of the AO correct and legally tenable?

Kindly give your considered opinion with case law to support the action of the assessee.