SOUTH EASTERN COALFIELDS LTD, BILASPUR(CG) V. DY.. C.I.T. CIRCLE-1(1), BILASPUR(CG)

ITA 155/BIL/2014

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5288 (ITAT-RAIPUR)
• Duration Of Justice: 7 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 11-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Bonafide belief; Wrong claim; Revenue expenditure; Capital expenditure; Set aside
• Section: 271(1)(c); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA , HON'BLE ACCOUNTANT MEMBER & SHRI N.K. CHOUDHRY, HONBLE JUDICIAL MEMBER I.T.A. NO. 151 / RPR /2014 (ASST. YEAR : 20 0 8 - 09 ) DCIT, CIRCLE - 1(1), BILASPUR. VS. SOUTH EASTERN COALFIELDS LTD., SEEPAT ROAD, BILASPUR, DIST. BILASPUR (C.G.) (APPELLANT) PAN NO. AADCS 2066 E (RESPONDENT) I.T.A. NO. 155 /RPR/2014 (ASST. YEAR : 2008 - 09) SOUTH EASTERN COALFIELDS LTD., SEEPAT ROAD, BILASPUR, DIST. BILASPUR (C.G.) VS. DCIT, CIRCLE - 1(1), BILASPUR. PAN NO. AADCS 2066 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AJITKORDE , SHRI VIVEK RUIA& SHRI ANKIT AGRAWAL, CAS DEPARTMENT BY : SHRI S.K. SINGH, CIT DR DATE OF HEARING : 27/07/2021. DATE OF PRONOUNCEMENT : 24 /0 9 /2021. 2 ITA NO. 151 & 155/RPR/2014 ( SOUTH EASTERN COALFIELDS LTD. ) O R D E R PER N.K. CHOUDHRY , JUDICIAL MEMBER THESE ARE THE CROSS APPEALS PREFERRED BY THE REVENUE DEPARTMENT AND THE ASSESSEE AGAINST THE ORDER DATED 20 /03 /2013 IMPUGNED HEREIN PASSED BY THE LD. COMMISSIONER OF INCOME TAX [FOR SHORT, LD. COMMISSIONER] , BILASPUR U/SEC. 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT') FOR THE A.Y. 2008 - 09 . ITA NO. 151/RPR/2014 2. THE REVENUE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. WHILE DELETING PENALTY IMPOSED BY THE AO FOR INADMISSIBLE GUEST HOUSE MAINTENANCE EXPENSES OF RS. 2,10,000/ - EVEN NO ADMISSIBLE EVIDENCE COULD BE PRODUCED BEFORE THE LD.CIT(A) HIMSELF BY THE ASSESSEE. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CANCELLING PENALTY FOR THE REPAIRS OF THE ROAD NOT BELONGING TO THE ASSESSEE TO THE EXTENT OF RS. 1,98,81,000/ - . 3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CANCELLING THE PENALTY IMPOSED BY THE AO FOR RS. 5801.76 LACS WITHOUT APPRECIATING THE FACT THAT ASSESSEE HAD FAILED TO FURNISH COMPLETE DETAILS OF QUANTITY TRANSPORTED AND RATE CHARGED BY THE TRANSPORTERS . 3 . FACTS OF THE CASE ARE ALREADY ON RECORD, THEREFORE FOR THE SAKE OF BREVITY THE SAME ARE NOT REPEATED HEREIN. 4. GROUND NO.1 RELATES TO DELETION OF PENALTY BY THE LD. COMMISSIONER, IMPOSED BY THE AO FOR INADMISSIBLE GUEST HOUSE MAINTENANCE EXPENSES TO THE EXTENT OF RS. 2,10,000/ - . 3 ITA NO. 151 & 155/RPR/2014 ( SOUTH EASTERN COALFIELDS LTD. ) HAVING HEARD THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THOUGH , THE CLAIM OF THE ASSESSEE QUA GUEST HOUSE EXPENSES HA S NOT BEEN COMPLETELY ALLOWED AND SUBJECT ED TO ADDITION PARTLY , HOWEVER, TO IMPOS E THE PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME , I T IS REQUIRED TO BE ESTABLISHED THAT THE ASSESSEE OFFER ED NO EXPLANATION , S ECONDLY , IF EXPLANATION IS OFFERED, THEN THE SAME IS F OUND TO BE FALSE BY THE AUTHORITIES , HOWEVER IN THIS CASE NOTHING CONTRARY APPEARS FROM THE PENALTY ORDER. IN THE INSTANT CASE, I T IS ALSO A FACT THAT THE ASSESSEE CONTINUOUSLY CLAIM ED THE EXPENDITURE INCURRED ON GUEST HOUSE S AS ALLOWABLE BUSINESS DEDUCTIONS SINCE A.Y. 2002 - 03 TILL A.Y. 2007 - 08 , AND NO DISALLOWANCE HAS EVER BEEN SUSTAINED BY THE LD. COMMISSIONER. E VEN THE FINDING OF THE LD. COMMISSIONER IN THE INSTANT CASE IS VERY CLEAR TO THE EFFECT THAT NEITHER THE ELEMENT OF CONCEALMENT OF INCOME NOR ANY INACCURATE PARTICULARS OF INCOME FURNISHED IN THE RETURN . FURTHER OBSERVATION OF T HE LD. COMMISSIONER TO THE EFFECT S THAT THE AO HAS NOT BROUGHT OUT ANY FALSITY OR BOGUS CLAIM OF EXPENDITURE INCORPORATED UNDER THE ABOVE HEADS OF EXPENSES GOES TO SHOW THAT THE SAID FINDING OF THE LD. COMMISSIONER IS CLINCHING IN ITS RIGHT PERSPECTIVE . EVEN OTHERWISE , NOTHING MATERIAL IS AVAILABLE ON RECORD TO CONTROVERT THE FINDINGS OF THE LD. COMMISSIONER, HENCE WE ARE INCLINED NOT TO INTERFERE WITH THE CONCLUSION DRAWN BY THE LD. COMMISSIONER AS THE SAME DOES NOT SUFFER FROM ANY PERVERSITY, IMPROPRIETY OR ILLEGALITY. RESULTANTLY , THIS GROUND OF APPEAL RAISED BY THE REVENUE DEPARTMENT STANDS DISMISSED . 5 . GROUND NO.2 RELATES TO THE CANCELLATION OF PENALTY ON THE HEAD R EPAIRS OF THE ROAD NOT BELONGING TO THE ASSESSEE AS ALLEGED TO THE EXTENT OF RS. 198.81 LAKHS. THE AO IMPOSED THE PENALTY ON THE SAID ADDITION BY OBSERVING AS UNDER: - 4 ITA NO. 151 & 155/RPR/2014 ( SOUTH EASTERN COALFIELDS LTD. ) AS REGARDS ASSETS NOT BELONGING TO THE ASSESSEE IT WAS OBSERVED BY THE ASSESSEE THAT ROADS CONSTRUCTED BY THE ASSESSEE WERE NOT E X CLUSIVELY MEANT FOR THE PURPOSE/USE OF EMPLOYEES OF THE ASSESSEE COMPANY ONLY BUT THE COMMON PUBLIC AT LARGE. THIS IS SUFFICIENT TO PROVE THAT ASSESSEE IS CONCEALING ITS PARTICULARS OF INCOME BY CLAIMING WRONG DEDUCTION. 5 .1 . ON APPE AL, T HE LD. COMMISSIONER DELETED THE SAID PENALTY ON THE GROUND THAT THERE IS NEITHER THE ELEMENT OF CONCEALMENT OF INCOME NOR ANY INACCURATE PARTICULARS OF INCOME FURNISHED IN THE RETURN. THE AO HAS NOT BROUGHT OUT ANY FALSITY OR BOGUS CLAIM OF EXPENDITURE INCORPORATED UNDER THE HEADS OF EXPENSES. THEREFORE , NO PENALTY UNDER THE AFORESAID SECTION IS IMPOSABLE AGAINST SUCH ADDITION. 5 .2 WE HAVE PERUSED THE O RDER DATED 06/11/2019 PASSED BY THE CO - ORDINATE BENCH IN ASSESSEES OWN CASE I.E. 05/BLPR/2012 FOR THE AY UNDER CONSIDERATION, WHEREIN THE ADDITION UNDER THE HEAD REPAIRS AND MAINTENANCE OF ASSETS NOT BELONGING TO THE COMPANY, WAS DELETED BY THE CO - ORDINATE BENCH , WHILE RELYING UPON THE ORDER OF CO - ORDINATE BENCH IN ITA NO. 187/J AB/ 2008 AS SUBMITTED BY THE LD. AR. THE LD. DR N EITHER REFUTE D THE CLAIM OF THE LD. AR NOR FINDING RECORDED IN THE SAID ORDER . CONSIDERING THE FACTS AS THE ADDITION QUA REPAIRS AND MAINTENANCE OF ASSETS NOT BELONGING TO THE COMPANY, HAS ALREADY BEEN DELETED BY THE CO - ORDINATE BENCH, HENCE NO PENALTY COULD SURVIVE AND CONSEQUENTLY THE GROUND NO. 2 IS DISMISSED BEING INFRUCTUOUS. 6 . GROUND NO.3 RELATES TO THE CANCELLATION OF PENALTY IMPOSED BY THE AO FOR RS. 5801.76 LAKHS UNDER THE HEAD PAYMENTS MADE TO THE TRANSPORTERS. 5 ITA NO. 151 & 155/RPR/2014 ( SOUTH EASTERN COALFIELDS LTD. ) 6 .1 THE AO IMPOSED THE PENALTY QUA ADDITION UNDER THE HEAD PAYMENTS MADE TO THE TRANSPORTERS BY HOLDING THAT IT IS EVIDENT FROM THE RECORDS THAT ASSESSEE COULD NOT PRODUCE THE DETAILS AS REQUIRED BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER HAS DISALLOWED THE EXPENDITURE. NON - MAINTENANCE OF PROPER DETAILS GOES TO PROVE THAT ASSESSEE IS FURNISH ING INACCU RATE PARTICULARS OF ITS INCOME. 6 .2 THE SAID PENALTY WAS DELETED BY THE LD. COMMISSIONER BY HOLDING THAT THERE IS NEITHER THE ELEMENT OF CONCEALMENT OF INCOME NOR ANY INACCURATE PARTICULARS OF INCOME FURNISHED IN THE RETURN. THE AO HAS NOT BROUGHT OUT ANY FALSITY OR BOGUS CLAIM OF EXPENDITURE INCORPORATED UNDER THE ABOVE HEADS OF EXPENSES , HENCE, NO PENALTY UNDER THE AFORESAID SECTION IS IMPOSABLE AGAINST SUCH ADDITION. 6 .3 WE MAY OBSERVE THAT CO - ORDINATE BENCH OF THE TRIBUNAL VIDE ITS ORDER DATED 06/11/2019 IN I.T.A. NO. 05/BLPR/2012 HAS ALLOWED THE GROUND RAISED BY THE ASSESSEE IN THE SAID APPEAL BEFORE THE TRIBUNAL QUA ADDITION UNDER THE HEAD PAYMENTS MADE TO THE TRANSPORTERS AGAINST WHICH PENALTY IS UNDER CONSIDERATION AND REMITTED THE ISSUE BACK FOR STATISTICAL PURPOSES TO THE FILE OF AO FOR DETERMINING THE ALLOWABILITY OF EXPENSES , HEN CE THE PENALTY IMPOSED BY THE AO CANNOT SURVIVE. THE LD . DR ALSO DID NOT CONTROVERT THE SAID FACTUAL POSITION. CONSEQUENTLY GROUND NO. 3 UNDER CONSIDERATION ALSO DOES NOT REQUIRE ANY INTERFERENCE BEING BECOMING INFRUCTUOUS, HENCE STANDS DISMISSED. 7 . RESULTANTLY, THE APPEAL FILED BY THE REVENUE DEPARTMENT STANDS DISMISSED. 6 ITA NO. 151 & 155/RPR/2014 ( SOUTH EASTERN COALFIELDS LTD. ) ITA NO.155/RPR/2014 8 . THE ALSO ASSESSEE ALSO CHALLENGED THE IMPUGNED ORDER ON SUSTAINING THE PENALTY ON ACCOUNT OF ADDITION OF RS. 54,393.33 LAKHS UNDER THE HEAD LAND COMPENSATION AND REHABILITATION EXPENSES . THOUGH , THE ASSESSEE IN ITS APPEAL HAS RAISED MANY GROUNDS INCLUDING ADDITIONAL GROUND W HICH IS LEGAL IN NATURE , HOWEVER IN THE BRIEF SYNOPSIS AND DURING THE HEARING OF APPEAL , DID NOT PRESS SPECIFICALLY THE ADDITIONAL GROUND WHICH IS NON - STRIKING OF IRRELEVANT PORTION IN THE PENALTY NOTICE AND FURTHER EMPHASIZED THAT ONLY ONE GROUND I.E. 1(A) IS AN UMBRELLA GROUND AND REQUIRES ADJUDICAT ION . 8.1 THE ASSESSEE HAD CLAIMED THE EXPENDITURE OF RS. 54,393.33 LAKHS UNDER THE HEAD LAND COMPENSATION AND REHABILITATION EXPENSES BY TREATING REVENUE IN NATURE . HOWEVER, THE AO DID NOT ACCEPT THE CLAIM OF THE ASSESSEE AND DISALLOWED THE SAME AS CAPITAL IN NATURE BY HOLDING THAT THE SIMILAR CLAIM MADE IN THE RETURN OF INCOME FOR THE A.Y. 1989 - 90 TO A.Y. 1996 - 97 HA S BEEN DISALLOWED BY THE DEPARTMENT BY HOLDING AS CAPITAL IN NATURE . THOUGH, THE ASSESSEE PREFERRED THE APPEAL BEFORE THE LD. COMMISSIONER, BILASPUR AND THE HON'BLE ITAT , NAGPUR BENCH , HOWEVER, THE ISSUE WAS DECIDED IN FAVOUR OF THE REVENUE BY THE HON'BLE TRIBUNAL IN ITA NO. 18 - 22/NAG/2001 VIDE ORDER DATED 28/02/2002. THE ASSESSEE, THOUGH, PREFERRED AN APPEAL BEFORE THE HON'BLE HIGH COURT OF CHHATTISGARH AGAINST THE SUSTAINING OF THE SAID ADDITION, HOWEVER, IT IS STILL PENDING FOR ADJUDICATION AND THE ASSESSEE IS CLAIMING THE EXPENDITURE AS REVEN UE IN NATURE IN THE RETURN OF INCOME FOR THE A.Y. 2009 - 10 WH I CH HAS BEEN DENIED BY THE AO EVERY YEAR. ON THE AFORESAID OBSERVATIONS, THE AO DISALLOWED THE SAID EXPENDITURE BY TREATING AS CAPITAL IN NATURE AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE AND ALSO INITIATED PENALTY PROCEEDINGS U / S EC. 7 ITA NO. 151 & 155/RPR/2014 ( SOUTH EASTERN COALFIELDS LTD. ) 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND VIDE PENALTY ORDER DATED 19/02/2013 IMPOSED THE PENALTY ON THE SAID ADDITION BY HOLDING AS UNDER: - AS REGARDS CLAIM FOR LAND COMPENSATION AND REHABILITATION, THE ASSESSING OFFICER HAS TREATED IT AS CAPITAL EXPENDITURE AND THIS STAND OF THE DEPARTMENT WAS UPHELD BY THE APPELLATE AUTHORITIES (UPTO TRIBUNAL) IN EARLIER YEARS ALSO. BY CLAIMING THE DEDUCTION UNDER THE GARB OF REVENUE EXPENDITURE IS TANTAMOUNT TO THE FURNISHING OF INACCURATE PARTICULARS. 8 . 2 THE SAID PENALTY ALSO CAME INTO CONSIDERATION BEFORE THE LD. COMM ISSIONER, WHO SUSTAINED THE PENALTY BY HOLDING AS UNDER: - REGARDING CLAIM OF LAND COMPENSATION AND REHABILITATION EXPENSES AS REVENUE EXPENDITURE, THE HON'BLE TRIBUNAL HAS HELD THE EXPENDITURE AS CAPITAL IN NATURE. BUT, THE APPELLANT COMPANY HAS BEEN CONSISTENTLY CLAIMING IT AS REVENUE EXPENDITURE. EVEN AFTER FINALITY OF THE FACT, CONTINUITY IN INCORRECT CLAIM IN LAW FOR EXPENDITURE ON LAND COMPENSATION AND REHABILATION WHICH HAS RESULTANT EFFECT OF REDUCING THE TAXABLE INCOME TO THAT EXTENT AND THUS, IT AMOUNTS TO GIVING INACCURATE PARTICULARS OF INCOME IN THE RETURN. THE EXPLANATION OFFERED BY THE APPELLANT COMPANY IS NEITHER BONAFIDE NOR SUBSTANTIATED. RELIANCE IS PLACED ON THE DECISION OF A.M. SHAH VS. CIT 238 ITR 415 (GUJ.); CIT VS. SM T. P.K. KOCHAMMU ANNA, PEROKE 125 ITR 624; ACIT VS KHANNAN&ANNADHNAM 142 TTJ 1 (DEL) AND IT IS HELD THAT PENALTY FOR FURNISHING SUCH INACCURATE PARTICULARS OF EXPENSES ATTRACTS PENALTY U/S. 271(1)(C). THE POSITION OF LAW EMERGING FROM THE FACTUAL MATRIX OF THE CASE IN RELIANCE PETRO PRODUCTS PVT. LTD. VS. CIT IS THAT THE ADDITION MADE BY THE AO IN RESPECT OF THE INTEREST CLAIMED AS A DEDUCTION US 36(1)(IIA) OF THE ACT WAS DELETED BY THE CIT(A) THOUGH IT WAS LATER RESTORED BY THE TRIBUNAL TO THE AO. THE APP EAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL WAS ADMITTED BY THE HIGH COURT. IT WAS, IN THESE CIRUMSTANCES THAT THE TRIBUNAL CAM E TO THE CONCLUSION THAT THE ASSESSEE HAD NEITHER CONCEALED THE INCOME NOR FILED INACCURATE PARTICULARS THEREOF. IN RECORDING THIS FINDING THE TRIBUNAL FELT THAT IF TWO VIEWS OF THE CLAIM OF THE ASSESSEE WERE POSSIBLE, THE EXPLANATION OFFERED BY IT COULD NOT BE SAID TO BE FALSE. THIS, HOWEVER, IS NOT THE FACTUAL POSITION IN THE CASE IN HAND AND THE FACTS OF THE PRE SENT CASE ARE CLEARLY DISTINGUISHABLE. IT IS TRUE THAT MERE SUBMISSION A CLAIM WHICH IS INCORRECT IN LAW WOULD NOT 8 ITA NO. 151 & 155/RPR/2014 ( SOUTH EASTERN COALFIELDS LTD. ) AMOUNT TO GIVING INACCURATE PARTICULARS OF INCOME OF THE ASSESSEE, BUT IT CANNOT BE DISPUTED THAT THE CLAIM MADE BY THE ASSESSEE NEEDS TO BE BONAFIDE. IF THE CLAIM BESIDES BEING INCORRECT IN LAW IS MALAFIDE, EXPLANATION - 1 TO SECTION 271(1) COME INTO PLAY AND WORK TO THE DISADVANTAGE OF THE APPELLANT COMPANY. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND LEGAL PROPOSITIONS, IT IS HELD THAT THE EXPLANATION FURNISHED BY THE APPELLANT COMPANY JUSTIFYING DEDUCTION ON LAND COMPENSATION AND REHABILITATION EXPENSES IS NOT BONA FIDE OR SUBSTANTIATED AND HENCE, PRESUMPTION IN EXPLANATION - 1 TO SECTION 271(1)(C) IS ATTRACTED. THE MINIMUM PENALTY IMPOSED AGAINST THE ADDITION IS CONFIRMED FOR FURNISHING INACCURATE PARTICULARS OF INCOME IN THE RETURN. PENALTY IMPOSED AGAINST OTHER ADDITI ONS AS DISCUSSED ABOVE IS CANCELLED. 8.3 THE AFFIRMATION OF PENALTY BY THE LD. COMMISSIONER HAS ALSO BEEN CHALLENGED BY THE ASSESSEE IN THE INSTANT APPEAL UNDER CONSIDERATION. 8.4 THE ASSESSEE REITERAT ED THE SAME ARGUMENTS RAISED BEFORE THE AUTHORITIES BELOW THAT THE LEGAL ISSUE INVOLVED IN THE INSTANT CASE RELATES TO THE TREATMENT OF EXPENDITURE AS CAPITAL OR REVENUE IN NATURE. NON - ACCEPTANCE OF CLAIM DOES NOT MEAN WRONG CLAIM AND BY ANY STRETCH OF IMAGINATION, MAKING AN INCORREC T CLAIM IN LAW CAN TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME A S HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD . [ (2010) 322 ITR 158 (SC) ] . IT WAS FURTHER CLAIMED BY THE ASSESSEE THAT THERE IS NO EVIDENCE OF INACCURATE PARTICULARS FURNISHED BY THE ASSESSEE BEFORE THE AO. IT IS A FACT THAT RELEVANT INFORMATION HA S BEEN FULLY DISCLOSED AND , THEREFORE , IT CAN NOT BE ATTRIBUTED THAT INACCURATE PARTICULARS OF INCOME HAVE BEEN FURNISHED. 8 . 5 ON THE CONTRARY, LD. DR REFUTED THE CLAIM OF THE ASSESSEE QUA TREATMENT OF LAND COMPENSATION AND REHABILITATION EXPENSES AS REVENUE IN NATURE , WHICH HAS BEEN DISALLOWED CONSISTENTLY NOT BY THE AUTHORITIES BELOW BUT ALSO BY THE HON'BLE TRIBUNAL AND STILL THE ASSESSEE IS CONTINUING 9 ITA NO. 151 & 155/RPR/2014 ( SOUTH EASTERN COALFIELDS LTD. ) TO CLAIM THE SAID EXPENSES AS REVENUE IN NATURE WHICH AMOUNTS TO FURNISH ING OF INACCURATE PARTICULARS OF INCOME AND ATTRACT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT AND THEREFORE, THE ORDERS PASSED BY THE AUTHORITIES BELOW DOES NOT SUFFERS FROM ILLEGALITY, PERVERSITY AND IMPROPRIETY AND NEEDS NO INTERFERENCE . 8.6 HAVING HEARD THE PARTIES AT LENGTH AND PERUSED THE MATERIAL AVAILABLE ON RECORD . THE ASSESSEE HAS CLAIMED THE LAND COMPENSATION AND REHABILITATION EXPENSES AS REVENUE IN NATURE , HOWEVER, THE SAME WAS TREATED AS CAPITAL IN NATURE BY THE AUTHORITIES BELOW AS WELL AS BY THE HON'BLE TRIBUNAL. THE SAID ADDITION RESULTED INTO IMPOSITION OF PENALTY BY THE AO AND AFFIRMATION BY THE LD. COMMISSIONER AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 8.7 THE HONBLE APEX COURT IN THE CASE OF ANANTHARAM VEERASINGAIAH & CO. VS COMMISSIONER OF INCOME TAX VS. CIT, 123 ITR 457(SC), HELD THAT THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDING ARE ALTOGETHER DIFFERENT AND MERELY BECAUSE AMOUNT WAS DISALLOWED DOES NOT IPSO FACTO LEAD TO LEVY OF PENALTY. 8.8 T HE HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (PVT.) LTD. (2010) 322 ITR 158 (SC) HAS HELD THAT PENALTY U/S 271(1)(C) IS NOT ATTRACTED MERELY BECAUSE THE ASSESSEE HAS CLAIMED DEDUCTION OF INTEREST EXPENDITURE WHICH HAS NOT BEEN ACC EPTED BY THE REVENUE AND MERE MAKING OF CLAIM, WHICH IS NOT MAINTAINABLE BY LAW, BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. FURTHER IT WAS HELD BY THE HONBLE COURT: MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE , WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY 10 ITA NO. 151 & 155/RPR/2014 ( SOUTH EASTERN COALFIELDS LTD. ) ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY UNDER SECTION 271(1)(C) . IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN I N CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER SECTION 271(1)(C) . THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLAT URE. 8.9 EVEN HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. M/S. RAJ OVERSEAS ( {2011} 336 ITR 261 {P&H} ) HELD THAT NO PENALTY U/S 271(1) (C) WAS LEVIABLE IN RESPECT OF THE DEDUCTION WRONGLY CLAIMED BY THE ASSESSEE U/S 80IB OF THE ACT IN RESPECT OF INCOME FROM DUTY DRAW BACK. 8.10 THE HON'BLE APEX COURT IN THE CASE OF HINDUSTAN STEEL LIMITED VS STATE OF ORISSA [1970 SCR (1) 753] HAS HELD THAT A PENALTY WILL ORDINARILY BE IMPOSED IN CASES WHERE THE PARTY ACTS DELIBERATELY IN DEFIANCE OF LAW, OR IS GUILTY OF CONTUMACIOUS OR DISHONEST CONDUCT, OR ACTS IN CONSCIOUS DISREGARD OF ITS OBLIGATION; BUT NOT, IN CASES WHERE THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLO WS FROM A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 8.11 IN THIS C ASE, AS THE REVENUE DEPARTMENT DID NOT FIND THE CLAIM OF THE ASSESSEE AS MAINTAINABLE AND TREATED THE SAME AS CAPITAL IN NATURE AS AGAINST REVENUE IN NATURE CLAIMED BY THE ASSESSEE AND MADE THE ADDITION AND CONSEQUENTLY IMPOSED THE PENALTY. T HE ASSESSEE IS CONTINUOUSLY CLAIMING THE SAID ADDITION AS REVENUE IN NATURE AND IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS ACTED DELIBERATELY IN DEFIANCE OF LAW, OR IS GUILTY OF CONTUMACIOUS OR DISHONEST CONDUCT, OR ACTS IN CONSCIOUS DISREGARD OF ITS OBLIGATION AND EVEN IT HAS NOT BEEN HELD BY THE AUTHORITIES BELOW THAT INFORMATION GIVEN BY THE ASSESSEE IS WRONG AND INCORRECT. I T IS UNDISPUTED FACT AS MENTIONED BY THE PARTIES THAT FOR THE PREVIOUS YEARS, THE APPEAL S AGAINST THE SAID SUSTENANCE OF EXPENSES AS 11 ITA NO. 151 & 155/RPR/2014 ( SOUTH EASTERN COALFIELDS LTD. ) CAPITAL IN NATURE IS PENDING BEFORE THE HON'BLE CHHATTISGARH HIGH COURT, THEREFORE, ISSUE QUA ADDITION ALSO BECOME DEBA TABLE ISSUE AND SUPPORT THE BONAFIDE CLAIM OF THE ASSESSEE AND THEREFORE THERE IS NO BASE TO ENTAIL TH E PENALTY UNDER SECTION 271(1)(C) OF THE ACT, HENCE O N THE AFORESAID CONSIDERATIONS, DELIBERATIONS AND OBSERVATIONS, WHILE RESPECTFULLY FOLLOWING THE PRO POSITIONS LAID DOWN BY THE HONBLE APEX COURT AND HIGH COURTS TO THE EFFECTS THAT T HE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDING ARE ALTOGETHER DIFFERENT AND MERELY BECAUSE AMOUNT WAS DISALLOWED DOES NOT IPSO FACTO LEAD TO LEVY OF PENALTY AND THE PENALTY CAN NOT BE LEVIED SIMPLY ON THE REASON THAT ADDITION HAS BEEN SUSTAINED. FURTHER MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME AND WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS , WE ARE OF THE CONSIDERED OPINION THAT THE PENALTY UNDER CONSIDERATION LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. C IT(A) IS LIABLE TO BE SET ASIDE , HENCE ORDERED ACCORDINGLY. ORDER PRONOUNCED ON DATED 2 4 - 09 - 2021 AS PER RULE 34(5) OF THE IT (APPELLATE TRIBUNAL) RULES. S D / - S D / - ( PRADIP KUMAR KEDIA ) ( N.K. CHOUDHRY ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 4 T H SEPTEMBER , 20 2 1 . VR/ - 12 ITA NO. 151 & 155/RPR/2014 ( SOUTH EASTERN COALFIELDS LTD. ) COPY TO: 1. THE ASSESSEE - SOUTH EASTERN COALFIELDS LTD., SEEPAT ROAD, BILASPUR, DIST. BILASPUR (C.G.) 2. THE REVENUE DCIT, CIRCLE - 1(1), BILASPUR. 3. LD. CIT(A), BILASPUR (CG) 4. CIT , BILASPUR (CG) 5. THE D.R . , RAIPUR . 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY, ITAT, RAIPUR (ON TOUR) .