Times Internet Limited, Noida V. Deputy Commissioner of Income-tax, New Delhi

ITA 1421/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0814 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2008-2009
• Appeal Filed On: 11-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business expenditure; Principle of natural justice; Reasonable cause; Revenue expenditure; Capital expenditure
• Section: 143(3); 14A; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE HONBLE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1421/DEL./2015 (ASSESSMENT YEAR : 2008-09) M/S. TIMES INTERNET LIMITED, VS. DCIT, CIRCLE 25 ( 1), (MERGED ENTITY OF TIMES BUSINESS NEW DELHI. SOLUTIONS LIMITED), REGD. OFFICE : 10, DARYA GANJ, DELHI 110 002. (PAN : AACCT4972F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GAUTAM JAIN, ADVOCATE SHRI PIYUSH KUMAR KAMAL, ADVOCATE SHRI LALIT MOHAN, CA REVENUE BY : NONE DATE OF HEARING : 06.09.2018 DATE OF ORDER : 14.09.2018 O R D E R PER KULDIP SINGH, ACCOUNTANT MEMBER : THE APPELLANT, M/S. TIMES INTERNET LIMITED (HEREINA FTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESE NT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 03.11.2014 PASSE D BY LD. CIT (APPEALS)-19, NEW DELHI QUA THE ASSESSMENT YEAR 200 8-09 ON THE GROUNDS INTER ALIA THAT :- ITA NO.1421/DEL./2015 2 1. THAT THE ORDER OF [EARNED COMMISSIONER OF INCOME TAX (APPEALS) IMPOSING PENALTY ON THE DISALLOWANCE MADE OF RS.16,35,151/- REPRESENTING EXPENDITURE INCURRED ON UPGRADATION OF WEBSITE AND, DISALLOWED AS CAPITAL EXPENDITURE IN AN ORDER OF ASSESSMENT DATED 13.12.2010 U/S 143(3) OF THE ACT I S IN EXCESS OF JURISDICTION. 1.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT ONCE THE LE ARNED ASSESSING OFFICER IN THE ORDER U/S 271(1)(C) OF THE ACT HAS HELD THAT THE ISSUE WAS A DEBATABLE ISSUE AND N OT LEVIED PENALTY THEREON, IT COULD NOT BE VALIDLY HEL D THAT, CLAIM WAS NOT BASED ON ANY REASONABLE INTERPRETATIO N OF LAW AND, APPELLANT HAS FAILED TO MAKE A CLEAR DISCL OSURE OF HIS CLAIM TO WARRANT THE LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. 1.2 THAT ADVERSE FINDINGS AND CONCLUSIONS RECORDED BY THE . LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) TO LEVY PENALTY IN RESPECT OF EXPENDITURE ON UPGRAD ATION OF WEBSITE ARE WHOLLY MISCONCEIVED, MISPLACED AND, ALSO CONTRARY TO THE SETTLED JUDICIAL POSITION. 2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO ERRED BOTH IN LAW AND ON FACTS I N UPHOLDING THE LEVY OF PENALTY ON AN ADDITION MADE O F SUM OF RS.37,52,700/- REPRESENTING EXPENDITURE INCURRED ON FEE PAID TO REGISTRAR OF COMPANIES ('ROC') AND, STAMP DUTY FOR INCREASE IN AUTHORIZED CAPITAL BY THE APPELLANT COMPANY 2.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT AFORESAID C LAIM OF EXPENDITURE WAS AN INADVERTENT BONAFIDE CLAIM MA DE BY AN APPELLANT WHO HAD BEEN ASSESSED AT A LOSS OF RS.71,97,11,614/- AND THEREFORE, PENALTY SUSTAINED BY HOLDING THAT APPELLANT FAILED TO MAKE A FULL AND TR UE DISCLOSURE OF FACTS OR NO EVIDENCE WAS FAILED TO SH OW IT WAS AN INADVERTENT ERROR IS NOT IN ACCORDANCE WITH LAW AND, THUS UNTENABLE. ITA NO.1421/DEL./2015 3 IT IS, THEREFORE, PRAYED THAT IT BE HELD THAT, NO PENALTY IS LEVIABLE ON THE FACTS AND CIRCUMSTANCES OF THE APPELLATE COMPANY AND AS SUCH, APPEAL OF THE APPELL ANT COMPANY BE ALLOWED. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF ASSESSMEN T COMPLETED UNDER SECTION 143 (3) OF THE INCOME-TAX ACT, 1961 ( FOR SHORT THE ACT) ASSESSING THE BALANCE UNABSORBED LOSS/DEPRECI ATION TO BE CARRIED FORWARD AT RS.71,97,11,614/-, PENALTY PROCE EDINGS HAVE BEEN INITIATED QUA THE ADDITION ON ACCOUNT OF EXPEN DITURE OF UNAUTHORIZED CAPITAL, ON ACCOUNT OF DISALLOWANCE OF CAPITAL EXPENDITURE AND DISALLOWANCE ON ACCOUNT OF SECTION 14A OF THE ACT. ASSESSEE HAS NOT PREFERRED TO CHALLENGE THE Q UANTUM AS IT WAS ASSESSED AT A LOSS BEARING NO REVENUE IMPLICATION. ASSESSING OFFICER INVOKED EXPLANATION 4 TO SECTION 271 (1)(C) OF THE ACT AND AFTER DECLINING THE CONTENTIONS RAISED BY THE ASSES SEE, PROCEEDED TO LEVY THE PENALTY ON THE TAX OF RS.12,42,492/- SOUGH T TO BE EVADED @ 100% TO THE TUNE OF RS.12,42,492/-. 3. ASSESSEE CARRIED THE MATTER BY WAY OF APPEAL BEF ORE THE LD. CIT (A) WHO HAS DELETED THE PENALTY LEVIED ON ACCOU NT OF DISALLOWANCE U/S 14A OF THE ACT, UPHELD THE PENALTY IN RESPECT OF EXPENDITURE ON INCREASE IN AUTHORIZED CAPITAL BUT E NHANCED THE PENALTY IN RESPECT OF CAPITAL EXPENDITURE ON WEBSIT E CREATION AND ITA NO.1421/DEL./2015 4 DEVELOPMENT. FEELING AGGRIEVED, THE ASSESSEE HAS C OME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. REVENUE DEPARTMENT HAS NOT PREFERRED TO PUT IN A PPEARANCE AND CONSEQUENTLY, WE PROCEEDED TO DECIDE THE PRESEN T APPEAL WITH THE ASSISTANCE OF THE LD. ARS FOR THE ASSESSEE AS W ELL AS ON THE BASIS OF DOCUMENTS AVAILABLE ON THE FILE. 5. WE HAVE HEARD THE LD. ARS FOR THE ASSESSEE TO TH E APPEAL, GONE THROUGH THE DOCUMENTS RELIED UPON AND ORDERS P ASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE LD. AR FOR THE ASSESSEE COMPANY CHALLENGING THE IMPUGNED ORDER CONTENDED INTER ALIA THAT SHOW-CAUSE NOTICE DATED 13.12.2010 ISSUED BY THE AO U/S 274, AVAILABLE AT P AGES 82 & 83 OF THE PAPER BOOK, AND FURTHER NOTICE DATED 29.04.2 011 AND 02.06.2011, AVAILABLE AT PAGES 84 & 85 OF THE PAP ER BOOK, ARE NOT A VALID NOTICE TO INITIATE THE PENALTY PROCEEDINGS AS THE ASSESSEE COMPANY HAS NOT BEEN MADE AWARE IF IT HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME AND RELIED UPON THE DECISION RENDERED B Y THE HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY & ORS. 359 ITR 565 (KARN.) ; THAT THE ASSESSEE HAS NOT FURNISHED ANY INACCURATE PARTICULARS OF INC OME RATHER ALL THE ITA NO.1421/DEL./2015 5 FACTS HAVE BEEN BROUGHT ON RECORD NOR ANY SUCH PART ICULARS HAVE BEEN FOUND TO BE INACCURATE OR ERRONEOUS OR FALSE L EADING TO CONCEALMENT OF INCOME; THAT EXPENDITURE INCURRED ON WEBHOSTING CHARGES AND MISC. EXPENDITURE FOR WEBSITE DEVELOPME NT WERE GENUINE BUSINESS EXPENDITURE AND RELIED UPON THE ASSESSEES OWN CASE FOR AYS 2004-05 & 2005-06 IN ITA NO.381/DEL/20 09 DATED 17.08.2015, AFFIRMED BY HONBLE DELHI HIGH COURT ; THAT EXPENDITURE INCURRED ON SHARE CAPITAL WERE ALSO BUS INESS EXPENDITURE AND WAS NOT HAVING ANY ENDURING BENEFIT TO THE ASSESSEE AND AS SUCH CLAIMED AS REVENUE EXPENSES AN D RELIED UPON THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNA L IN JRK AUTO PARTS (P) LTD. VS. ACIT IN ITA NO.3458/DEL/2014 DAT ED 31.05.2017 AFTER NOTING THE DECISION OF DELHI HIGH COURT IN CASE OF CIT VS. AT &T COMMUNICATION SERVICES (P) LTD. IN ITA 526/2011 . 7. TO PROCEED FURTHER, NOTICE DATED 13.12.2010 ISSU ED U/S 271(1)(C) OF THE ACT IS EXTRACTED FOR READY PERUSAL AS UNDER :- NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961 TO M/S. TIMES BUSINESS SOLUTIONS CO. LTD., MUMBAI DATED : 13.12.2010 ITA NO.1421/DEL./2015 6 WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2008-09 IT APPEARS TO ME TH AT YOU:- HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH ME RETURN OF INCOME WHICH YOU WERE REQUIRED TO FURNISH BY A NOTICE GIVEN UNDER SECTION 22(1)/22(2) /34 OF THE INDIAN INCOME-TAX ACT, 1922 OR WHICH YOU WER E REQUIRED TO FURNISH UNDER SECTION 139 (1) OR BY A N OTICE GIVEN UNDER SECTION 139(2)/148 OF THE INCOME-TAX AC T, 1961, NO.DATED OR HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH IT WITHI N THE TIME ALLOWED AND THE MANNER REQUIRED BY THE SAID SECTION 139(1) OR BY SUCH NOTICE. HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE UNDER SECTION 22(4)/23)2 OF THE INDIA N INCOME-TAX ACT, 1922 OR UNDER SECTION 142(1)/143(1) OF THE INCOME-TAX ACT, 1961, HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 11.30 AM/PM ON 14.1.2011 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE UNDER SECTION 271 OF THE INCOME TAX ACT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY O F BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPRESENTATIV E YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECTION 271(1)(C) WITHIN 15 DAYS. SD/- (CHATURBHUJ DAS) DY. COMMISSIONER OF INCOME TAX, CIRCLE 7 (3), MUMBAI INCOME-TAX OFFICER 8. UNDISPUTEDLY, ADDITIONS MADE AGAINST THE ASSESSE E DURING QUANTUM PROCEEDINGS HAVE ALREADY BEEN CONFIRMED. I T IS SETTLED ITA NO.1421/DEL./2015 7 PRINCIPLE OF LAW THAT THE PENALTY CANNOT BE IMPOSED MERELY ON THE GROUND THAT ADDITIONS MADE IN THE INCOME OF THE ASS ESSEE HAS BEEN CONFIRMED RATHER TO PROCEED WITH IMPOSITION OF PENA LTY U/S 271(1)(C), THE AO HAS TO PROVE THAT THERE WAS CONCE ALMENT OF PARTICULARS OF INCOME OR ASSESSEE HAS FURNISHED INA CCURATE PARTICULARS OF SUCH INCOME. 9. BARE PERUSAL OF THE NOTICE ISSUED TO THE ASSESSE E U/S 271(1)(C) OF THE ACT REPRODUCED ABOVE GOES TO PROVE THAT ASSESSEE HAS NOT BEEN CALLED UPON TO EXPLAIN IF HE HAS CONCE ALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF SUCH INCOME RATHER A TICK HAS BEEN MARKED AGAINST BOTH T HE CHARGES MENTIONED IN THE PRINTED PROFORMA. HONBLE KARNATA KA HIGH COURT IN CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY & ORS. (SUPRA) DEALT WITH THE IDENTICAL ISSUE THREADBARE A ND CAME TO THE FOLLOWING CONCLUSION :- 63. IN THE LIGHT OF WHAT IS STATED ABOVE, WHAT EME RGES IS AS UNDER: A) PENALTY UNDER SECTION 271(1)(C) IS A CIVIL LIABI LITY. B) MENS REA IS NOT AN ESSENTIAL ELEMENT FOR IMPOSI NG PENALTY FOR BREACH OF CIVIL OBLIGATIONS OR LIABILIT IES. C) WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDI ENT FOR ATTRACTING CIVIL LIABILITY. ITA NO.1421/DEL./2015 8 D) EXISTENCE OF CONDITIONS STIPULATED IN SECTION 271(1)(C) IS A SINE QUA NON FOR INITIATION OF PENAL TY PROCEEDINGS UNDER SECTION 271. E) THE EXISTENCE OF SUCH CONDITIONS SHOULD BE DISCERNIBLE FROM THE ASSESSMENT ORDER OR ORDER OF T HE APPELLATE AUTHORITY OR REVISIONAL AUTHORITY. F) EVER IF THERE IS NO SPECIFIC FINDING REGARDING THE EXISTENCE OF THE CONDITIONS MENTIONED IN SECTION 271(1)(C), AT LEAST THE FACTS SET OUT IN EXPLANATIO N 1(A) & (B) IT SHOULD BE DISCERNIBLE FROM THE SAID ORDER WHICH WOULD BY A LEGAL FICTION CONSTITUTE CONCEALMENT BEC AUSE OF DEEMING PROVISION. G) EVEN IF THESE CONDITIONS DO NOT EXIST IN THE ASSESSMENT ORDER PASSED, AT LEAST, A DIRECTION TO I NITIATE PROCEEDINGS UNDER SECTION 271(L)(C) IS A SINE QUA N ON FOR THE ASSESSMENT OFFICER TO INITIATE THE PROCEEDI NGS BECAUSE OF THE DEEMING PROVISION CONTAINED IN SECTI ON 1(B). H) THE SAID DEEMING PROVISIONS ARE NOT APPLICABLE TO THE ORDERS PASSED BY THE COMMISSIONER OF APPEALS AN D THE COMMISSIONER. I) THE IMPOSITION OF PENALTY IS NOT AUTOMATIC. J) IMPOSITION OF PENALTY EVEN IF THE TAX LIABILITY IS ADMITTED IS NOT AUTOMATIC. K) EVEN IF THE ASSESSEE HAS NOT CHALLENGED THE ORD ER OF ASSESSMENT LEVYING TAX AND INTEREST AND HAS PAID TAX AND INTEREST THAT BY ITSELF WOULD NOT BE SUFFICIENT FOR THE AUTHORITIES EITHER TO INITIATE PENALTY PROCEEDINGS OR IMPOSE PENALTY, UNLESS IT IS DISCERNIBLE FROM THE ASSESSMENT ORDER THAT, IT IS ON ACCOUNT OF SUCH UNEARTHING OR ENQUIRY CONCLUDED BY AUTHORITIES IT H AS RESULTED IN PAYMENT OF SUCH TAX OR SUCH TAX LIABILI TY CAME TO BE ADMITTED AND IF NOT IT WOULD HAVE ESCAPE D FROM TAX NET AND AS OPINED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. ITA NO.1421/DEL./2015 9 L) ONLY WHEN NO EXPLANATION IS OFFERED OR THE EXPLANATION OFFERED IS FOUND TO BE FALSE OR WHEN TH E ASSESSEE FAILS TO PROVE THAT THE EXPLANATION OFFERE D IS NOT BONAFIDE, AN ORDER IMPOSING PENALTY COULD BE PASSED. M) IF THE EXPLANATION OFFERED, EVEN THOUGH NOT SUBSTANTIATED BY THE ASSESSEE, BUT IS FOUND TO BE BONAFIDE AND ALL FACTS RELATING TO THE SAME AND MAT ERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, NO PENALTY COULD BE IMPOSED. N) THE DIRECTION REFERRED TO IN EXPLANATION IB TO SECTION 271 OF THE ACT SHOULD BE CLEAR AND WITHOUT ANY AMBIGUITY. O) IF THE ASSESSING OFFICER HAS NOT RECORDED ANY SATISFACTION OR HAS NOT ISSUED ANY DIRECTION TO INI TIATE PENALTY PROCEEDINGS, IN APPEAL, IF THE APPELLATE AU THORITY RECORDS SATISFACTION, THEN THE PENALTY PROCEEDINGS HAVE TO BE INITIATED BY THE APPELLATE AUTHORITY AND NOT THE ASSESSING AUTHORITY. P) NOTICE UNDER SECTION 274 OF THE ACT SHOULD SPECIFICALLY STATE THE GROUNDS MENTIONED IN SECTION 271(1)(C), I.E., WHETHER IT IS FOR CONCEALMENT OF I NCOME OR FOR FURNISHING OF INCORRECT PARTICULARS OF INCOM E Q) SENDING PRINTED FORM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW. R) THE ASSESSEE SHOULD KNOW THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLES OF NATURAL JUSTICE IS OFFENDED. ON THE BASIS OF SUCH PROCEEDIN GS, NO PENALTY COULD BE IMPOSED TO THE ASSESSEE. S) TAKING UP OF PENALTY PROCEEDINGS ON ONE LIMB AND FINDING THE ASSESSEE GUILTY OF ANOTHER LIMB IS BAD IN LAW. T) THE PENALTY PROCEEDINGS ARE DISTINCT FROM THE ASSESSMENT PROCEEDINGS. THE PROCEEDINGS FOR IMPOSIT ION ITA NO.1421/DEL./2015 10 OF PENALTY THOUGH EMANATE FROM PROCEEDINGS OF ASSESSMENT, IT IS INDEPENDENT AND SEPARATE ASPECT O F THE PROCEEDINGS. U) THE FINDINGS RECORDED IN THE ASSESSMENT PROCEEDINGS IN SO FAR AS 'CONCEALMENT OF INCOME' AN D 'FURNISHING OF INCORRECT PARTICULARS' WOULD NOT OPE RATE AS RES JUDICATA IN THE PENALTY PROCEEDINGS. IT IS O PEN TO THE ASSESSEE TO CONTEST THE SAID PROCEEDINGS ON MER ITS. HOWEVER, THE VALIDITY OF THE ASSESSMENT OR REASSESS MENT IN PURSUANCE OF WHICH PENALTY IS LEVIED, CANNOT BE THE SUBJECT MATTER OF PENALTY PROCEEDINGS. THE ASSESSME NT OR REASSESSMENT CANNOT BE DECLARED AS INVALID IN TH E PENALTY PROCEEDINGS. 10. SO, FOLLOWING THE LAW LAID DOWN BY HONBLE HIGH COURT, WE ARE OF THE CONSIDERED VIEW THAT WHEN THE ASSESSEE H AS NOT BEEN SPECIFICALLY MADE AWARE OF THE CHARGES LEVELED AGAI NST HIM AS TO WHETHER THERE IS A CONCEALMENT OF INCOME OR FURNISH ING OF INACCURATE PARTICULARS OF INCOME ON HIS PART, THE P ENALTY U/S 271(1)(C) OF THE ACT IS NOT SUSTAINABLE. THE DECIS ION RENDERED BY THE HONBLE HIGH COURT IN MANJUNATHA COTTON AND GINNING FACTORY & ORS. (SUPRA) IS APPLICABLE TO THE FACTS AND CIRCUMSTANCE S OF THIS CASE. 11. ON MERIT, THE NEXT CONTENTION RAISED BY THE LD. AR FOR THE ASSESSEE THAT THE COMPANY HAS BONAFIDELY INCURRED A ND CLAIMED THE EXPENDITURE OF WEBHOSTING AND MISC. EXPENDITURE FOR WEBSITE DEVELOPMENT AMOUNTING TO RS.16,35,151/- AND THESE E XPENDITURE HAVE BEEN HELD TO BE REVENUE EXPENDITURE HAVING NOT CREATED ANY ITA NO.1421/DEL./2015 11 ENDURING BENEFIT TO THE ASSESSEE RATHER IT WAS INCU RRED ONLY TO UPDATE THE WEBSITE TO KEEP PACE WITH THE DEVELOPMEN T IN TECHNOLOGY AND AS SUCH WAS NOT OF PERMANENT CHARACT ER. SIMILAR EXPENDITURE HAVE BEEN HELD TO BE REVENUE IN NATURE IN ASSESSEES OWN CASE IN AY 2004-05 BY THE TRIBUNAL IN ITA NO.38 1/DEL/2009 DATED 17.08.2015 , AFFIRMED BY THE HONBLE DELHI HIGH COURT. 12. SO, WHEN THE ASSESSEE HAS COME UP WITH BONAFIDE CLAIM, EVEN IF IT IS NOT ACCEPTED, IT WOULD NOT PER SE TAN TAMOUNT TO FURNISHING INACCURATE PARTICULARS SO AS TO ATTRACT THE PENALTY PROCEEDINGS U/S 271(1)(C) AS HAS BEEN HELD BY HONB LE DELHI HIGH COURT IN CASE CITED AS CIT VS. IFCI LIMITED (2010) 328 ITR 611 (DELHI) . OPERATIVE PART OF THE AFORESAID JUDGMENT IS EXTR ACTED AS UNDER :- HELD; DISMISSING THE APPEAL, THAT THE ASSESSEE HAD FILED THE RETURN AND FURNISHED ALL PARTICULARS. THE ASSES SEE HAD EXPLAINED DURING THE PENALTY PROCEEDINGS THAT T HE INVESTMENTS WERE WRITTEN OFF IN THE BOOKS OF ACCOUN T AND WERE CLAIMED AS DEDUCTION ON ACCOUNT OF LOSS WH ICH OCCURRED TO THE ASSESSEE IN THE COMPUTATION OF TOTA L INCOME. THE TRIBUNAL ANALYSING THE FACTS HAD EXPRES SED THE VIEW THAT THERE HAD BEEN NO FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME AND THE ASSES SEE HAD DECLARED THE ENTIRE MATERIAL. IT WAS A CASE WHE RE A CLAIM PUT FORTH BY THE ASSESSEE AS REGARDS THE LOSS WAS NOT ACCEPTED BUT THAT WOULD NOT PER SE TANTAMOUNT T O FURNISHING ANY KIND OF INACCURATE PARTICULARS. THUS , THERE HAD BEEN NO CONCEALMENT OF INCOME OR FURNISHI NG OF INACCURATE PARTICULARS. HENCE, THE CANCELLATION OF PENALTY WAS VALID. ITA NO.1421/DEL./2015 12 13. SIMILARLY, HONBLE HIGH COURT OF DELHI IN CASE CITED AS CIT VS. DCM LIMITED 359 ITR 102 HELD AS UNDER :- 'LAW DOES NOT BAR OR PROHIBIT AN ASSESSEE FOR MAKIN G A CLAIM, WHICH HE BELIEVES MAY BE ACCEPTED OR IS PLAUSIBLE. WHEN SUCH A CLAIM IS MADE DURING THE COU RSE OF REGULAR OR SCRUTINY ASSESSMENT, LIBERAL VIEW IS REQUIRED TO BE TAKEN AS NECESSARILY THE CLAIM IS BO UND TO BE CAREFULLY SCRUTINIZED BOTH ON FACTS AND IN LAW. FULL PROBE AND APPRAISAL IS NATURAL AND NORMAL. THREAT O F PENALTY CANNOT BECOME A GAG AND/ OR HAUNT AN ASSESS EE FOR MAKING A CLAIM WHICH MAY BE ERRONEOUS OR WRONG, WHEN IT IS MADE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. NORMALLY, PENALTY PROCEEDINGS IN SUCH CASES SHOULD NOT BE INITIATED UNLESS THERE ARE VALI D OR GOOD GROUNDS TO SHOW THAT FACTUAL WERE PROVIDED IN THE COMPUTATION. LAW DOES NOT BAR OR PROHIBIT A PERSON FROM MAKING A CLAIM, WHEN HE KNOWS THE MATTER IS GOING TO BE EXAMINED BY THE ASSESSING OFFICER. 14. HONBLE SUPREME COURT IN A CASE CITED AS RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. OPERATIVE PART OF WHICH IS REPRODUCE D FOR READY REFERENCE AS UNDER :- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUS T HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME . THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAIL OF THE CLAIM MAD E. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN OR DER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKIN G ITA NO.1421/DEL./2015 13 AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCUR ATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SU CH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILI TY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPL IED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRE CT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTIO N OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A ME RE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 15. FURTHERMORE, INCURRING OF RS.37,52,700/- BY THE ASSESSEE ON SHARE CAPITAL HAVE ALSO BEEN DULY EXPLAINED BY THE ASSESSEE BY DEBITING THE SAME UNDER HEAD LEGAL AND PROFESSIONA L CHARGES. ASSESSEE HAS SUO MOTO DISALLOWED AN AMOUNT OF RS.7, 00,000/- RELATING TO INCREASE IN CAPITAL AND RS.5,00,000/- P ERTAINING TO FILING FEES AND RS.2,00,000/- ON ACCOUNT OF STAMP DUTY IN COMPUTATION OF INCOME DEBITED UNDER THE HEAD RENT, RATES AND TAXES . ALL THESE FACTS GO TO PROVE THAT THE ASSESSEE HAS COME UP WITH BONA FIDE CLAIM AND EVEN IF THE SAME IS PROVED TO BE WRONG, IT CANNOT A TTRACT THE PROVISIONS CONTAINED U/S 271 (1)(C) OF THE ACT. ITA NO.1421/DEL./2015 14 17. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT AO/CIT (A) HAVE ERRED IN LEVYI NG/ ENHANCING THE PENALTY WHICH IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE ORDERED TO BE DELETED. CONSEQUENTLY, APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 14 TH DAY OF SEPTEMBER, 2018. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) PRESIDENT JUDICIAL MEMBER DATED THE 14 TH DAY OF SEPTEMBER, 2018 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-19, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.