Wegmans Financial Services Ltd., New Delhi V. ITO, New Delhi

ITA 5000/DEL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1748 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 01-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 21-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRAKAR
• Keywords: Speculation loss
• Section: 143(3); 14A; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : H : NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO . 5000 /DEL/201 2 ASSESSMENT YEAR: 2006 - 07 WEGMANS FINANCIAL SERVICES VS. INCOME TAX OFFICER, LTD,. F - 7, EAST OF KAILASH, WARD - 18(30 NEW DELHI NEW DELHI (PAN: AAACW0819J ) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. VINOD JAIN, CA RESPONDENT BY: SH. J.P. CHANDRAKAR, SR. DR DATE OF HEARING: 01.07.2015 DATE OF PRONOUNCEMENT: 12.08.2015 ORDER PER INTURI RAMA RAO, A.M. : THIS IS AN APPEAL FILED BY THE ASSESSEE COMPANY FOR THE ASSESSMENT YEAR 2006 - 07 AGAINST THE ORDER OF CIT(A), DT. 13.07.2012, RAISING THE FOLLOWING GROUNDS OF APPEAL : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE NO PENALTY UNDER SECTION 271 (1)( C) IS IMPOSABLE ON THE ASSESSEE. 2. THAT THE ASSESSEE HAS TRULY AND CORRECTLY FURNISHED ACCURATE PARTICULARS OF HIS INCOME. 3. THE ASSESSEE HAS NOT CONCEALED THE PARTICULARS OF HIS INCOME. 4. THE ASSESSEE HAS IN FACT DISCLOSED THE BROUGHT FORWARD SPECULATIVE LOSSES CARRIED FORWARD FROM 2001 - 02 TRULY AND CORRECTL Y IN THE RETURN OF INCOME AND SOUGHT ADJUSTMENT OF THE SAME AGAINST THE INCOME DURING THE YEAR AS SET OFF OF CARRIED FORWARD LOSSES AGAINST SPECULATIVE PROFIT. 5. THAT THE ASSESSEE WAS ALSO ENTITLED FOR A REBATE U/S 88E OF RS.8,62,099/ - . 6. THAT IN CASE THE AS SESSEE WOULD HAVE BEEN ALLOWED THE SPECULATIVE LOSSES TO BE ADJUSTED AGAINST HIS INCOME OF THE CURRENT YEAR, THE TAX PAYABLE 2 WOULD WORK OUT TO RS. 1,28,415/ - , WHEREAS IN CASE OF DISALLOWANCE OF THE CARRIED FORWARD LOSSES, THE TAX PAYABLE WOULD WORK OUT TO RS. 1,80,747/ - BEING THE TAX PAYABLE AFTER THE REBATE ULS 88E IS GIVEN. ACCORDINGLY THE INCOME TAX OFFICER RECTIFIED THE NET DEMAND OF ADDITIONAL TAX TO RS. 52,322/ - . 7. THAT IN TERMS OF SECTION 271 (1) THE PENALTY PAYABLE BY THE ASSESSEE WILL BE A SUM WHI CH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED 3 TIMES, THE AMOUNT OF TAX SOUGHT TO BE EVADED BY THE REASON OF THE CONCEALMENT OF PARTICULARS OF ASSESSEE'S INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. IN VIEW OF THIS PROVISION, WIT HOUT PREJUDICE TO OUR PRECEDING GROUNDS, THE MAXIMUM AMOUNT OF TAX WHICH COULD BE CONSIDERED AS TAX SOUGHT TO BE EVADED WILL BE RS. 52,322/ - AND IMPOSITION OF PENALTY ON THE BASIS OF DISALLOWED BROUGHT FORWARD SPECULATIVE LOSS OF RS 28,59,046/ - AMOUNTING T O RS 953,015/ - , EQUIVALENT TO TAX PAYABLE ON SUCH DISALLOWANCE IS NOT MAINTAINABLE AND IT SHOULD QUASHED. 8. THAT WITHOUT PREJUDICE TO THE ABOVE, THE COMPUTATION OF PENALTY OF 100% OF TAX TO BE EVADED HAS BEEN WRONGLY CALCULATED IN VIEW OF FINAL TAX BECOMING PAYABLE BY THE ASSESSEE AFTER GIVING APPEAL EFFECT OF RS 52,3221 - 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE APPELLANT IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSINESS OF STOCK BROKING AND T RADING IN SHARES, DERIVATIVES, SECURITIES AND COMMODITIES. FOR THE ASSESSMENT YEAR 2006 - 07, THE APPELLANT FIL ED ITS RETURN OF INCOME ON 20.11.2006, DECLARING LOSS OF RS. 1,39,056/ - . SUBSEQUENTLY, THE CASE WAS TAKEN FOR SCRUTINY ASSESSMENT AND THE ASSESSMEN T WAS COMPETED UNDER SECTION 143(3) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) VIDE ORDER DATED 18.12.2008 AT A TOTAL INCOME OF RS. 60,60,620/ - . WHILE DOING SO, THE ASSESSING OFFICER MADE DISALLOWANCE OF RS. 33,40,634/ - UNDER SECTION 14A OF THE AC T AND DISALLOWED THE SET OFF SPECULATIVE LOSS OF RS. 28,59,046/ - FOR AY 2001 - 02 AGAINST SPECULATIVE PROFIT OF RS. 53,05,139/ - . AGGRIEVED BY THE ABOVE ORDER, AN APPEAL WAS FILED BEFORE THE CIT(A). THE LEARNED CIT(A) VIDE HIS ORDER 3 DATED 8 TH DECEMBER, 2009, GRANTED RELIEF IN RESPECT OF ADDITION UNDER SECTION 14A OF THE ACT, HOWEVER, SUSTAINED THE ADDITION ON ACCOUNT OF NOT ALLOWING THE SET OFF SPECULATIVE LOSS OF RS. 28,59,046/ - AGAINST SPECULATIVE PROFIT OF THE CURRENT YEAR. THE ORDER OF CIT(A) ATTAINED FINA LITY SINCE NEITHER THE ASSESSEE NOR THE DEPARTMENT WAS IN APPEAL BEFORE THE TRIBUNAL. WHILE THE MATTER STOOD THUS , THE ASSESSING OFFICER LEVIED PENALTY OF RS. 9,53, 015/ - UNDER SECTION 271(1)(C) OF THE A CT ON THE AMOUNT OF ADDITION IN RESPECT OF NOT ALLOWIN G SET OFF OF SPECULATIVE LOSS OF RS. 28,59,046/ - VIDE ORDER DATED 29 TH MARCH, 2011. AGGRIEVED BY THIS ORDER, AN APPEAL WAS PREFERRED BEFORE THE CIT(A) WHO VIDE ORDER DATED 13 TH JULY, 2012 CONFIRMED THE ORDER OF PENALTY BY PLACING RELIANCE ON THE DECISION S OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ZOOM COMMUNICATION PVT. LTD., (2010) - TIOL - 361 - HC - DEL - IT AND CIT VS. ESCORTS FINANCE LTD., 183 TAXMAN 453 (DEL); 292 ITR 658. AGGRIEVED BY THIS ORDER, THE APPELLANT IS BEFORE US. 3. IT IS SUBM ITTED BY THE LD. AUTHORIZED REPRESENTATIVE THAT THE APPELLANT NEITHER FURNISHED INACCURATE PARTICULARS OF INCOME, NOR CONCEALED ANY PARTICULARS OF INCOME. THE APPELLANT MADE A FULL DISCLOSURE OF THE CLAIM IN THE RETURN OF INCOME. IT WAS ONLY BASED ON THE P ARTICULARS DISCLOSED BY THE APPELLANT THE DISALLOWANCE WAS MADE. THEREFORE, NO PENALTY IS LEVIABLE AND IN THIS CONNECTION HE RELIED UPON THE PROPOSITION LAID DOWN BY THE HON BLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. 322 ITR 158 THAT NO PENALTY CAN BE LEVIED FOR MERE DISALLOWANCE OF CLAIM . 4 4. ON THE OTHER HAND, THE LD. DR PLACED HEAVY RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THIS CASE IS SQUARELY COVERED BY THE DECISIONS OF HON BLE JURISDICTIONAL HIGH CO URT IN THE CASES OF ESCORTS FINANCE LTD. (SUPRA) AND ZOOM COMMUNICATION PVT. LTD.(SUPRA) , THEREFORE, THE ORDER S OF AUTHORITIES BELOW SHOULD BE UPHELD. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE FROM THE RECORD TH AT THE DISALLOWANCE OF CLAIM WAS MADE SOLELY BASED ON THE PARTICULARS FURNISHED BY THE APPELLANT IN THE RETURN OF INCOME. IT IS NOT THAT THE ASSESSING OFFICER MADE A DISALLOWANCE BASED ON THE DETECTION OF ANY CONCEALMENT NOR THE ASSESSING OFFICER FOUND ANY PARTICULARS FURNISHED BY THE APPELLANT TO BE INACCURATE. IN OUR CONSIDERED OPINION, THE RATIO LAID DOWN BY THE HON BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD. (SUPRA) IS SQUARELY A P P L I C A B L E TO THE FACTS OF THE PRESENT CASE. THE HON B LE SUPREME COURT HELD AS FOLLOWS: A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN ORDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HI S INCOME. PRESENT IS NOT THE CASE OF CONCEALMENT OF THE INCOME. THAT IS NOT THE CASE OF THE REVENUE EITHER. HOWEVER, THE LEARNED COUNSEL FOR REVENUE SUGGESTED THAT BY MAKING INCORRECT CLAIM FOR THE EXPENDITURE ON INTEREST, THE ASSESSEE HAS FURNISHED INACCU RATE PARTICULARS OF THE INCOME. AS PER LAW LEXICON, THE MEANING OF THE WORD 'PARTICULAR' IS A DETAIL OR DETAILS (IN PLURAL SENSE); THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT. THEREFORE, THE WORD 'PARTICULARS' USED IN THE SECTION 271(1)(C) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT IS AN ADMITTED POSITION IN THE PRESENT CASE THAT NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. IT IS NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST, PRIMA FACIE, THE ASSESSEE CANNOT BEHELD GUILTY OF FURNISHIN G INACCURATE PARTICULARS. THE LEARNED COUNSEL ARGUED THAT 'SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPENDITURE ON INTEREST WOULD AMOUNT TO GIVING IN ACCURATE 5 PARTICULARS OF SUCH INCOME'. WE DO NOT THINK THAT SUCH CAN BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENAL TY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. IN COMMISSIONER OF INCOME TAX, DELHI VS. ATUL MOHAN BINDAL [2009(9) SCC 589], WHERE THIS COURT WAS CONSI DERING THE SAME PROVISION, THE COURT OBSERVED THAT THE ASSESSING OFFICER HAS TO BE SATISFIED THAT A PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THIS COURT REFERRED TO ANOTHER DECISION OF THIS COURT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS [2008(13) SCC 369], AS ALSO, THE DECISION IN UNION OF INDIA VS. RAJASTHAN SPG. & WVG. MILLS [2009(13) SCC 448] AND REITERATED IN PARA 13 THAT: - '13. IT GOES WITHOUT SAYING THAT FOR APPLICABILITY OF SECTION 271(1)(C), CONDITIONS STATED THEREIN MUST EXIST. 8. THEREFORE, IT IS OBVIOUS THAT IT MUST BE SHOWN THAT THE CONDITIONS UNDER SECTION 271(1)(C) MUST EXIST BEFORE THE PENALTY IS IMPOSED. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND U PON THE RETURN FILED BECAUSE THAT IS THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMB AI & ANR. [2007(6) SCC 329], THIS COURT EXPLAINED THE TERMS 'CONCEALMENT OF INCOME' AND 'FURNISHING INACCURATE PARTICULARS'. THE COURT WENT ON TO HOLD THEREIN THAT IN ORDER TO ATTRACT THE PENALTY UNDER SECTION 271(1)(C), MENS REA WAS NECESSARY, AS ACCORDIN G TO THE COURT, THE WORD 'INACCURATE' SIGNIFIED A DELIBERATE ACT OR OMISSION ON BEHALF OF THE ASSESSEE. IT WENT ON TO HOLD THAT CLAUSE (III) OF SECTION 271(1) PROVIDED FOR A DISCRETIONARY JURISDICTION UPON THE ASSESSING AUTHORITY, INASMUCH AS THE AMOUNT OF PENALTY COULD NOT BE LESS THAN THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF SUCH CONCEALMENT OF PARTICULARS OF INCOME, BUT IT MAY NOT EXCEED THREE TIMES THEREOF. IT WAS POINTED OUT THAT THE TERM 'INACCURATE PARTICULARS' WAS NOT DEFINED ANYWHERE IN T HE ACT AND, THEREFORE, IT WAS HELD THAT FURNISHING OF AN ASSESSMENT OF THE VALUE OF THE PROPERTY MAY NOT BY ITSELF BE FURNISHING INACCURATE PARTICULARS. IT WAS FURTHER HELD THAT THE ASSESSEE MUST BE FOUND TO HAVE FAILED TO PROVE THAT HIS EXPLANATION IS NOT ONLY NOT BONA FIDE BUT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS INCOME WERE NOT DISCLOSED BY HIM. IT WAS THEN HELD THAT THE EXPLANATION MUST BE PRECEDED BY A FINDING AS TO HOW AND IN WHAT MANNER, THE ASSESSEE HAD FURNISHED THE PARTICULARS OF HIS INCOME. THE COURT ULTIMATELY WENT ON TO HOLD THAT THE ELEMENT OF MENS REA WAS ESSENTIAL. IT WAS ONLY ON THE POINT OF MENS REA THAT THE JUDGMENT IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. WAS UPSET. IN UNI ON OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS (CITED SUPRA), AFTER QUOTING FROM SECTION 271 EXTENSIVELY AND ALSO CONSIDERING SECTION 271(1)(C), THE COURT CAME TO THE CONCLUSION THAT SINCE 6 SECTION 271(1)(C) INDICATED THE ELEMENT OF STRICT LIABILITY ON THE ASSESSEE FOR THE CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WHILE FILING RETURN, THERE WAS NO NECESSITY OF MENS REA. THE COURT WENT ON TO HOLD THAT THE OBJECTIVE BEHIND ENACTMENT OF SECTION 271(1)(C) READ WITH EXPLANATIONS INDICATED WITH THE SAID SEC TION WAS FOR PROVIDING REMEDY FOR LOSS OF REVENUE AND SUCH A PENALTY WAS A CIVIL LIABILITY AND, THEREFORE, WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS WAS THE CASE IN THE MATTER OF PROSECUTION UNDER SECTION 276 - C OF THE ACT. THE BASIC REASON WHY DECISION IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA) WAS OVERRULED BY THIS COURT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS (CITED SUPRA), WAS THAT ACCORDING TO THIS COURT TH E EFFECT AND DIFFERENCE BETWEEN SECTION 271(1)(C) AND SECTION 276 - C OF THE ACT WAS LOST SIGHT OF IN CASE OF DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA). HOWEVER, IT MUST BE POINTED OUT THAT IN UNION OF INDIA VS. DHARAM ENDRA TEXTILE PROCESSORS (CITED SUPRA), NO FAULT WAS FOUND WITH THE REASONING IN THE DECISION IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA), WHERE THE COURT EXPLAINED THE MEANING OF THE TERMS 'CONCEAL' AND INACCURATE' . IT WAS ONLY THE ULTIMATE INFERENCE IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA) TO THE EFFECT THAT MENS REA WAS AN ESSENTIAL INGREDIENT FOR THE PENALTY UNDER SECTION 271(1)(C) THAT THE DECISION IN DILIP N. SHROFF V S. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA) WAS OVERRULED. 9. WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INAC CURATE PARTICULARS. IN WEBSTER'S DICTIONARY, THE WORD 'INACCURATE' HAS BEEN DEFINED AS: - 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT'. WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTICULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. 10. IT WAS TRIED T O BE SUGGESTED THAT SECTION 14A OF THE ACT SPECIFICALLY EXCLUDED THE DEDUCTIONS IN RESPECT OF THE EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. IT 7 WAS FURTHER POINTED OUT THAT THE DIV IDENDS FROM THE SHARES DID NOT FORM THE PART OF THE TOTAL INCOME. IT WAS, THEREFORE, REITERATED BEFORE US THAT THE ASSESSING OFFICER HAD CORRECTLY REACHED THE CONCLUSION THAT SINCE THE ASSESSEE HAD CLAIMED EXCESSIVE DEDUCTIONS KNOWING THAT THEY ARE INCORRE CT; IT AMOUNTED TO CONCEALMENT OF INCOME. IT WAS TRIED TO BE ARGUED THAT THE FALSEHOOD IN ACCOUNTS CAN TAKE EITHER OF THE TWO FORMS; (I) AN ITEM OF RECEIPT MAY BE SUPPRESSED FRAUDULENTLY; (II) AN ITEM OF EXPENDITURE MAY BE FALSELY (OR IN AN EXAGGERATED AMO UNT) CLAIMED, AND BOTH TYPES ATTEMPT TO REDUCE THE TAXABLE INCOME AND, THEREFORE, BOTH TYPES AMOUNT TO CONCEALMENT OF PARTICULARS OF ONE'S INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. WE DO NOT AGREE, AS THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NO T. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY UNDER SECTION 271(1)(C). IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN 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 LEGISLATURE. 11. IN THIS BEHALF THE OBSERVATI ONS OF THIS COURT MADE IN SREE KRISHNA ELECTRICALS V. STATE OF TAMIL NADU & ANR. [(2009) 23VST 249 (SC)] AS REGARDS THE PENALTY ARE APPOSITE. IN THE AFOREMENTIONED DECISION WHICH PERTAINED TO THE PENALTY PROCEEDINGS IN TAMIL NADU GENERAL SALES TAX ACT, THE COURT HAD FOUND THAT THE AUTHORITIES BELOW HAD FOUND THAT THERE WERE SOME INCORRECT STATEMENTS MADE IN THE RETURN. HOWEVER, THE SAID TRANSACTIONS WERE REFLECTED IN THE ACCOUNTS OF THE ASSESSEE. THIS COURT, THEREFORE, OBSERVED: 'SO FAR AS THE QUESTION OF PENALTY IS CONCERNED THE ITEMS WHICH WERE NOT INCLUDED IN THE TURNOVER WERE FOUND INCORPORATED IN THE APPELLANT'S ACCOUNT BOOKS. WHERE CERTAIN ITEMS WHICH ARE NOT INCLUDED IN THE TURNOVER ARE DISCLOSED IN THE DEALER'S OWN ACCOUNT BOOKS AND THE ASSESSING AU THORITIES INCLUDE THESE ITEMS IN THE DEALER'S TURNOVER DISALLOWING THE EXEMPTION, PENALTY CANNOT BE IMPOSED. THE PENALTY LEVIED STANDS SET ASIDE.' THE SITUATION IN THE PRESENT CASE IS STILL BETTER AS NO FAULT HAS BEEN FOUND WITH THE PARTICULARS SUBMITTED BY THE ASSESSEE IN ITS RETURN. 12. THE TRIBUNAL, AS WELL AS, THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE HIGH COURT HAVE CORRECTLY REACHED THIS CONCLUSION AND, THEREFORE, THE APPEAL FILED BY THEREVENUE HAS NO MERITS AND IS DISMISSED. 8 6. FOLLO WING THE RATIO LAID DOWN BY THE HON BLE APEX COURT IN THE ABOVE CASE, WE HEREBY DELETE THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. THEREFORE, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN FULL. 7. IN THE RESULT, THE APPEAL IS ALLOWED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 1 2 T H A U G U S T , 2015. S D / - S D / - ( I.C. SUDHIR ) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 2 T H A U G U S T , 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI