M/s. Anjala Exhibitors Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 6358/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4953 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 01-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P SINGH SENIOR
• Keywords: Business expenditure; Opportunity of being heard; Principle of natural justice; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.6358/DEL./2015 (ASSESSMENT YEAR : 2008-09) M/S. ANJALA EXHIBITORS PVT. LTD., VS. DCIT, CIRCLE 1 (1), G 80, LAJPAT NAGAR 1, NEW DELHI. NEW DELHI 110 024. (PAN : AAACA0219J) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RANJAN CHOPRA, CA REVENUE BY : SHRI B.P. SINGH, SENIOR DR DATE OF HEARING : 15.10.2018 DATE OF ORDER : 23.10.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, M/S. ANJALA EXHIBITORS PVT. LTD. (HE REINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESE NT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 04.09.2015 PASSE D BY LD. CIT (APPEALS)-1, NEW DELHI AFFIRMING THE PENALTY ORDER DATED 31.03.2014 PASSED U/S 271(1)(C) OF THE INCOME-TAX A CT, 1961 (FOR SHORT THE ACT), QUA THE ASSESSMENT YEAR 2008-09 O N THE GROUNDS INTER ALIA THAT :- ITA NO.6358/DEL./2015 2 1. THE LEARNED COMMISSIONER (APPEALS) HAS ERRED IN CONFIRMING THE PENALTY OF RS.1,56,000/- IMPOSED BY AO U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 THAT THE ORDER PASSED BY LEARNED CIT (APPEALS) AND LEARNED AO ARE BAD IN LAW AND ON FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER (APPEALS) WAS NOT CORRECT IN NOT APPRECIATING THE FACTS THAT THERE WA S NEITHER ANY FURNISHING OF INACCURATE PARTICULARS NO R ANY CONCEALMENT OF INCOME. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF COMPLETED ASSESSMENT UNDER SECTION143 (3) OF THE INCOME-TAX ACT, 1961 (F OR SHORT THE ACT) AT THE INCOME OF RS.1,68,12,110/- AS AGAINST THE RETURNED INCOME OF RS.1,30,17,718/- BY MAKING ADDITION OF RS .4,56,800/- ON ACCOUNT OF DISALLOWANCE OF FOREIGN TRAVEL EXPENSES, PENALTY PROCEEDINGS WERE INITIATED BY WAY OF ISSUANCE OF NO TICE U/S 271(1)(C) OF THE ACT READ WITH SECTION 274 OF THE A CT. AO PROCEEDED TO FORM THE OPINION THAT SINCE THE ASSESS EE HAD FAILED TO FILE BILLS, VOUCHERS, THE VISA, PASSPORT OF DIRECTO RS, TICKETS AND OTHER DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE CLAIM THAT THESE EXPENSES WERE INCURRED EXCLUSIVELY FOR BUSINESS PURPOSE, IT AMOUNTS TO FURNISHING OF INACCURATE PARTICULARS OF INCOME TO T HE EXTENT OF RS.4,56,800/- AND THEREBY LEVIED THE PENALTY OF RS. 1,56,000/- U/S 271(1)(C) OF THE ACT. ITA NO.6358/DEL./2015 3 3. ASSESSEE CARRIED THE MATTER BY WAY OF APPEAL BEF ORE THE LD. CIT (A) WHO HAS CONFIRMED THE PENALTY LEVIED BY THE AO. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIB UNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, PENALTY OF RS.1,56,000/- HAS BEEN IMPOSED U/S 271(1)(C) OF THE ACT PRIMARILY ON ACCOUNT OF ADDITI ON/DISALLOWANCE OF RS.4,56,800/- CLAIMED BY THE ASSESSEE AS BUSINES S EXPENSES ON ACCOUNT OF FOREIGN TRAVEL EXPENSES OF DIRECTORS OF THE COMPANY. IT IS ALSO NOT IN DISPUTE THAT QUANTUM HAS BEEN ACCEPT ED BY THE ASSESSEE COMPANY. IT IS ALSO NOT IN DISPUTE THAT T HE AO HAS DISALLOWED THE FOREIGN TRAVEL EXPENSES EXCLUSIVELY ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE BILLS, VOUCHERS , THE VISA, PASSPORT OF THE DIRECTORS, TICKETS OR/AND OTHER DOC UMENTARY EVIDENCE. 6. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCU MSTANCES OF THE CASE, ORDER PASSED BY THE LOWER REVENUE AUTHORI TIES AND ARGUMENTS ADDRESSED BY THE LD. AR TO THE PARTIES, T HE SOLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS:- ITA NO.6358/DEL./2015 4 AS TO WHETHER THE ASSESSEE HAS CONCEALED PARTICULA RS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME DURING ASSESSMENT PROCEEDINGS WHILE INTERPRETING THE PROVISIONS CONTAINED U/S 271(1)(C) OF THE ACT? 7. THE LD. AR FOR THE ASSESSEE COMPANY CHALLENGING THE IMPUGNED ORDER CONTENDED THAT SHOW-CAUSE NOTICE ISS UED BY THE AO U/S 274, AVAILABLE AT PAGE 32 OF THE PAPER BOOK IS NOT A VALID NOTICE TO INITIATE THE PENALTY PROCEEDINGS AS THE A SSESSEE COMPANY HAS NOT BEEN MADE AWARE IF IT HAS CONCEALED THE PAR TICULARS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF S UCH INCOME AND RELIED UPON THE DECISION RENDERED BY THE HONBLE KA RNATAKA HIGH COURT IN CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY & ORS. 359 ITR 565 (KARN.), AFFIRMED BY HONBLE SUPREME COURT. 8. HOWEVER, ON THE OTHER HAND, LD. DR FOR THE REVEN UE TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. AR FOR THE ASSES SEE COMPANY CONTENDED INTER ALIA THAT THE NOTICE ISSUED U/S 271 (1)(C) OF THE ACT IS NOT A STANDALONE DOCUMENT WHICH IS OTHERWISE BAS ED UPON ASSESSMENT ORDER; THAT THE ASSESSEE HAS NOT FURNISH ED THE DETAILS OF FOREIGN TRAVEL OF THE DIRECTORS VIZ. BILLS, VOUCHER S, THE VISA, PASSPORT OF THE DIRECTORS, TICKETS OR/AND OTHER DOC UMENTARY EVIDENCE DESPITE AVAILING NUMEROUS OPPORTUNITIES, A ND RELIED UPON THE ORDER PASSED BY THE AO AS WELL AS LD. CIT (A). ITA NO.6358/DEL./2015 5 9. UNDISPUTEDLY, ADDITION MADE AGAINST THE ASSESSEE DURING QUANTUM PROCEEDINGS HAS ALREADY BEEN CONFIRMED. IT IS SETTLED 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. 10. TO PROCEED FURTHER, WE WOULD LIKE TO REPRODUCE NOTICE ISSUED U/S 271(1)(C) OF THE ACT FOR READY PERUSAL :- NOTICE UNDER SECTIO 274 READ WITH SECTIO 271 OF THE INCOME TAX ACT, 1961 OFFICE OF THE DY. COMMISSIONER OF INCOME TAX CIR. L(L),ROOM NO 390 C R BUILDING,NEW DELHI. DATE: 22/12/2010 TO THE PRINCIPAL OFFICER, M/S ANJALA EXHIBITORS PVT LTD. 10796, JHANDEWALAN ROAD, NABI KAROM, NEW DELHI - 110055 PAN: AAACA0219J WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2008-09. IT APPEARS TO ME T HAT YOU:- HAVE WITHOUT REASONABLE CAUSE TO FAILED TO COMPLY WITH A NOTICE UNDER SECTION 142(1)/143(2) OF THE IN COME TAX ACT 1961. ITA NO.6358/DEL./2015 6 *HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 12.30 AM. ON 04/01/2011 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 N OT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WH ICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UN DER SECTION 271. (SHIV SWROOP SINGH) DY. COMMISSIONER OF INCOME TAX CIR. 1(1), NEW DELHI. 11. BARE PERUSAL OF THE NOTICE ISSUED TO THE ASSESS EE 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. ITA NO.6358/DEL./2015 7 C) WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDI ENT FOR ATTRACTING CIVIL LIABILITY. 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 ITA NO.6358/DEL./2015 8 FROM TAX NET AND AS OPINED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 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. ITA NO.6358/DEL./2015 9 T) THE PENALTY PROCEEDINGS ARE DISTINCT FROM THE ASSESSMENT PROCEEDINGS. THE PROCEEDINGS FOR IMPOSIT ION 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. 12. 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 CASE LAW RELIED UPON BY THE LD. DR ARE NOT APPLICABLE TO THE FACTS AND C IRCUMSTANCES OF THIS CASE IN THE FACE OF THE DECISIONS RENDERED BY THE HONBLE HIGH COURT IN MANJUNATHA COTTON AND GINNING FACTORY & ORS. (SUPRA). 13. ON MERIT, THE NEXT CONTENTION RAISED BY THE LD. AR FOR THE ASSESSEE COMPANY THAT THE ASSESSEE COMPANY HAS BONA FIDELY CLAIMED AN AMOUNT OF RS.4,56,800/- AS FOREIGN TRAVE L EXPENSES INCURRED BY THE DIRECTORS WHOLLY AND EXCLUSIVELY FO R BUSINESS ITA NO.6358/DEL./2015 10 PURPOSES. UNDISPUTEDLY, ASSESSEE HAS PRODUCED COPY OF PASSPORT OF THE DIRECTORS TO PROVE THEIR FOREIGN VISITS ALONG W ITH COPY OF FRINGE BENEFIT TAX AUDIT REPORT BEFORE LD. CIT (A), WHO HA S CONFIRMED THE PENALTY LEVIED BY THE AO ON THE GROUND THAT SINCE T HE ASSESSEE HAD FAILED TO PRODUCE DOCUMENTARY EVIDENCE VIZ. DETAILS OF BILLS, VOUCHERS, THE VISA, PASSPORT OF THE DIRECTORS, TICK ETS OR/AND OTHER DOCUMENTARY EVIDENCE, IT HAS CONCEALED A PART OF IT S INCOME BY FURNISHING INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.4,56,800/-. 14. IT IS SETTLED PRINCIPLE OF LAW THAT WHEN THE AS SESSEE COMPANY HAD COME UP WITH BONAFIDE CLAIM AND WITHOUT ACTUAL OR CONSCIOUS CONCEALMENT ON ITS PART, MERE DISALLOWANCE OF THE E XPENSES CLAIMED BY THE ASSESSEE DOES NOT AMOUNT TO CONCEALM ENT OF INACCURATE PARTICULARS OF INCOME OR FURNISHING OF I NACCURATE PARTICULARS OF INCOME. ASSESSEE COMPANY HAD MADE A BONAFIDE CLAIM FOR DEDUCTION OF BUSINESS EXPENSES BY RELYING UPON COPY OF PASSPORT AND BANK STATEMENT AS THE ENTIRE EXPENSES HAVE BEEN INCURRED THROUGH BANKING CHANNEL AND FBT AUDIT REPO RT, WHICH DOES NOT LEAD TO THE CONCLUSION THAT THE ASSESSEE H AS CLAIMED BOGUS EXPENSES. 15. HONBLE DELHI HIGH COURT IN CASE CITED AS CIT VS. IFCI LIMITED (2010) 328 ITR 611 (DELHI) HELD THAT IN CASE, ANY CLAIM ITA NO.6358/DEL./2015 11 MADE BY THE ASSESSEE HAS NOT BEEN ACCEPTED IT WOULD NOT PER SE TANTAMOUNT TO FURNISHING ANY ACCOUNT OF INACCURATE PARTICULARS TO ATTRACT THE PENALTY PROCEEDINGS U/S 271(1)(C). OPE RATIVE PART OF THE AFORESAID JUDGMENT IS EXTRACTED 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. 16. 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 ITA NO.6358/DEL./2015 12 FROM MAKING A CLAIM, WHEN HE KNOWS THE MATTER IS GOING TO BE EXAMINED BY THE ASSESSING OFFICER. 17. HONBLE SUPREME COURT IN A CASE CITED AS CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) . DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. OPERATI VE PART OF WHICH IS REPRODUCED 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 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. ITA NO.6358/DEL./2015 13 18. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT AO/CIT (A) HAVE ERRED IN LEVYI NG/CONFIRMING THE PENALTY OF RS.1,56,000/- WHICH IS NOT SUSTAINAB LE IN THE EYES OF LAW AS MERE DISALLOWANCE OF BONAFIDELY CLAIMED EXPE NSES BY THE ASSESSEE DOES NOT AMOUNT TO FURNISHING OF INACCURAT E PARTICULARS OF INCOME SUFFICIENT TO ATTRACT THE PROVISIONS CONTAIN ED U/S 271(1)(C) OF THE ACT, HENCE PENALTY OF RS.1,56,000/- IS ORDER ED TO BE DELETED. CONSEQUENTLY, THE APPEAL FILED BY THE ASSESSEE IS H EREBY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 23 RD DAY OF OCTOBER, 2018. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 23 RD DAY OF OCTOBER , 2018 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-1, NEW DELHI 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.