THE ACIT, Circle-4(1), Indore V. M/S. INDORE PREMIER CO-OPERATIVE BANK LTD., Indore

ITA 71/IND/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99040 (ITAT-INDORE)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 02-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Depreciation; Wrong claim; Bad and doubtful debts; Revised return
• Section: 143(3); 12

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO. 71 / IND/201 5 A.Y. : 200 7 - 08 ACIT, M/S. INDORE PREMIER COOP. BANK LIMITED, CIRCLE 4(1), VS INDORE. INDORE. APPELLANT RESPONDENT P.A.N. NO AAAAI0701M APPELLANT BY SHRI R.A.VERMA, SR. DR RESPONDENT BY SHRI SANTOSH DESHMUKH, CA DATE OF HEARING : 02.09.2015 DATE OF PRONOUNCEMENT : 06.10.2015 2 2 O R D E R PER GARASIA, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, INDORE, DATED 31.10.2014 FOR THE ASSESSM ENT YEAR 2007-08. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A COOPERATIVE BANK DOING THE BUSINESS OF BANKING. THE ASSESSEE HAS FILED THE RETURN DECLARING THE INCOME OF RS. 1,47,16,720/ - WITHOUT CLAIMING ANY DEDUCTION U/S 36(1)(VIIA). THIS WAS THE FIRST Y EAR WHERE THE INCOME OF THE COOPERATIVE BANK BECAME TAXABLE U/S 80P. THE ACCOUNTS ARE AUDITED AND THE TAR WAS FILED. THE RETURN WAS REVIS ED ON 27.3.2009 CLAIMING THE DEDUCTION OF RS. 431.34 LAKHS U/S 36(1 )(VIIA). THE ASSESSEE HAS FILED THE REVISED RETURN AND CLAIMED T HE DEDUCTION U/S 36(1)(VIIA). DURING THE ASSESSMENT PROCEEDINGS, THE AO HAS CALLED FOR INFORMATION AND DEDUCTION U/S 36(1)(VIIA) ON ACCOUN T OF PROVISIONS OF BAD DEBTS AND DOUBTFUL DEBTS WERE NOT ALLOWABLE. AF TER VARIOUS DISCUSSIONS WITH THE ASSESSEE, THE ASSESSEE ACCEPTE D THAT AS PER THE C.B.D.T. INSTRUCTION NO.17, PROVISIONS FOR BAD DEBT AND DOUBTFUL DEBTS WILL BE ALLOWABLE WHILE CALCULATING THE DEDUCTION @ 7.5% OF PROFIT PLUS 10% OF AVERAGE ADVANCES OF RURAL BRANCHES. CONSIDER ING THE ABOVE FACTS, THE ASSESSEE HAS AGREED TO TAKE THE CLAIM OF RS. 62.55 LAKHS AGAINST RS. 431.34 LAKHS CLAIMING IN THE REVISED RE TURN. THEREFORE, THE 3 3 AO HAS DISALLOWED THE CLAIM U/S 36(1)(VIIA) OF RS. 3,68,79,836/- AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. THE PENALTY U/S 271(1)(C) WAS IMPOSED. 3. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS U NDER :- 6.1 I HAVE GONE THROUGH THE PENALTY ORDER, THE RELEVANT ASSESSMENT ORDER PASSED BY ADDL. CIT U/S 143(3) OF INCOME-TAX ACT, 1961, WRITTEN SUBMISSION S FILED BY THE APPELLANT DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, PENALTY PROCEEDINGS AND APPEAL PROCEEDINGS. THE AO HAS REFERRED THE ORDER SHEET ENTRIES DATED 23.10.2009 AND 24.10.2009 WHEREBY APPELLANT, AFTER DISCUSSION WITH THE ADDL. CIT, INDORE IN THE LIGHT OF CBDT INSTRUCTION NO. 17 DATED 26.11.2008 HAD WITHDRAWN THE EXCESS CLAIM OF RS. 3,68,79,836/- . IT HAS ALSO BEEN BROUGHT OUT BY THE AO THAT THE APPELLANT HAS ACCEPTED THE MISTAKE AND WITHDRAWN THE CLAIM ONLY A FTER THE QUERIES WERE RAISED BY THE AO. THEREFORE, THE A O WAS SATISFIED THAT THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND PROCEEDED TO L EVY 4 4 PENALTY OF RS. 1.50 CRORES U/S 271(1)(C) OF INCOME TAX ACT, 1961. 6.2 DURING THE COURSE OF APPEAL PROCEEDINGS, THE APPELLANT HAS FILED DETAILED WRITTEN SUBMISSIONS WH ICH ARE FILED IN THE FORM OF STATEMENT OF FACTS ALONG W ITH THE GROUNDS OF APPEAL. BESIDES THIS SUBMISSION, THE APPELLANT HAS ALSO MADE FURTHER WRITTEN SUBMISSIONS ALONG WITH THE PAPER BOOK PAGE NUMBERED FROM 1 TO 1 19 ON 11.08.2014 WHICH HAS ALSO BEEN REPRODUCED ABOVE. I HAVE GONE THROUGH THE WRITTEN SUBMISSIONS CAREFULLY AND OBSERVED THAT THE APPELLANT HAS MADE TENABLE SUBMISSIONS HIGHLIGHTING THE CIRCUMSTANCES UNDER WH ICH THE CLAIM WAS REVISED AND LATER ON WAS WITHDRAWN DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE SUBMISSIONS OF THE APPELLANT REVOLVE AROUND TWO BASIC FACTS I.E THE APPELLANT WAS NOT AWARE OF THE INSTRU CTIONS OF CBDT DATED 26.11.2008 WHEREBY THE CLAIM WAS TO BE RESTRICTED TO ACTUAL PROVISIONS IN THE BOOKS OF ACC OUNTS. SECONDLY, IT HAS BEEN BROUGHT OUT THAT AS ON THE DATE OF REVISING THE RETURN THE ISSUE WAS HIGHLY DEBATABLE AS THE CLAIM WAS LODGED ON THE BASIS OF DECISION OF HON'BLE 5 5 BANGALORE BENCH OF ITAT IN THE CASE OF SYNDICATE BA NK VS. DCIT REPORTED IN [2001] 78 ITD 103 (BANG.) WHER EIN THE HON'BLE MEMBERS OF THE BENCH CAME TO THE CONCLUSION THAT THE DEDUCTION U/S 36(1)(VIIA) OF TH E I.T. ACT, 1961 IS A SPECIFIED DEDUCTION GIVEN BY THE STA TUTE IRRESPECTIVE OF THE QUANTUM PROVIDED BY THE ASSESSE E IN ITS ACCOUNTS TOWARDS PROVISIONS FOR BAD AND DOUBTFU L DEBTS. I HAVE ALSO GONE THROUGH THE ASSESSMENT ORDE R AND OBSERVED THAT THE ADDL. CIT, RANGE 4, INDORE WH ILE PASSING THE ASSESSMENT ORDER DATED 30.12.2009 AT PARA 6.13 AT PAGE NO. 8 HIMSELF HAS OBSERVED THAT THERE IS A SATISFACTION THAT THE ASSESSEE HAS MADE WRONG CLAIM BY REVISED RETURN, MAY BE BECAUSE THE CLAIM IS LEGALLY DEBATABLE ONE. THEREFORE, IT IS OBSERVED THAT UNDOUBTEDLY THE ISSUE UNDER REFERENCE I.E. THE CLAIM OF PROVISION FOR BAD AND DOUBTFUL DE BT WAS DEBATABLE AS ON THE DATE OF FILING OF REVISED RETUR N. FURTHER, THE AO HAS BASED THE LEVY OF PENALTY OR TH E GROUND THAT THE APPELLANT HAD WITHDRAWN THE CLAIM O NLY AFTER POINTING OUT THE SAME TO THE APPELLANT. 6.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND A LSO 6 6 PARA 9 & 10 OF THE SUBMISSIONS DATED 11.08.2014 FILED BY THE APPELLANT. IT IS OBSERVED THAT THE AO HAS RECORDED THE DISCUSSION ON THE ISSUE OF PROVISIONS FOR BAD AND DOUBTFUL DEBTS ON 24.10.2009 AND FURTHER REFERENCE TO ORDER SHEET ENTRY DATED 23.10.2009 HAS BEEN MADE AT PARA 5.3 OF THE ASSESSMENT ORDER. IT I S RECORDED THAT VIDE REPLY SET NO. 1 DATED 07/08.09.2 009, THE LD MANAGING DIRECTOR OF THE BANK, SHRI S.K. KHA RE HAD ACCEPTED THAT AS PER TERMS OF INSTRUCTION 7 OF CBDT, THE PROVISIONS FOR BAD AND DOUBTFUL DEBT CLAIMED AT RS. 4.31 CRORES SHALL NOT BE ALLOWED. IT IS EVIDENT FRO M THESE DISCUSSION THAT THE APPELLANT HAS SUO-MOTU ACCEPTED THE TERMS OF INSTRUCTIONS OF CBDT MUCH BEFORE THE DETAILED DISCUSSION AND ORDER SHEET ENTRIES WERE RECORDED ON 23.10.2009 AND 24.10.2009. THE APPELLAN T HAS ALSO BROUGHT TO MY NOTICE THAT ONLY GENERAL QUESTIONS LIKE JUSTIFICATION FOR CLAIM U/ S 36(1) (VIIA) WAS ASKED BY THE AO VIDE NOTICE DATED 08.09.2009. 6.4 IT HAS ALSO, BEEN BROUGHT TO MY NOTICE THAT HON 'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCT S PVT.LTD., 322 ITR 158/189 ( S. C.) HAS HELD THAT TH E 7 7 PENALTY IS NOT LEVIABLE IN THE CASE OF CLAIM MADE B Y THE APPELLANT WHICH IS LEGALLY NOT SUSTAINABLE. IT HAS ALSO BEEN BROUGHT TO MY NOTICE THAT THE BOMBAY HIGH COUR T REFUSED TO INTERFERE WITH THE DECISION OF ITAT, MUM BAI IN THE CASE OF M/S SOMANY EVERGREEN KNITS LTD (2013) 35 TAXMANN.COM 629 [BOM.], WHEREIN IT WAS HELD BY THE HON'BLE TRIBUNAL THAT THE EXCESS CLAIM OF DEPRECIATION BY T HE ASSESSEE WAS DUE TO INADVERTENT MISTAKE AND BONA FI DE WHICH WAS RECTIFIED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THE SAME WAS NOT LIABLE FOR PENALTY U/S 271(1)(C) OF THE I.T. ACT, 1961. 1N VIEW OF THE ABOVE DISCUSSION, IN THE PRESENT CASE, THE AO WAS N OT JUSTIFIED IN LEVYING THE PENALTY U/S 271 (1)(C) OF INCOME- TAX ACT, 1961. ACCORDINGLY, THE SAME IS DIRECTED TO BE DELETED. ALL THE ABOVE GROUNDS ARE ALLOWED. 4. THE LD. SENIOR D.R. RELIED UPON THE ORDER OF THE AO AND SUBMITTED THAT AS PER THE DECISION IN THE CASE OF C IT VS. ZOOM COMMUNICATION PRIVATE LIMITED, (2010) 327 ITR 510 ( DEL), WHEREIN IT IS HELD THAT WHEN THE ASSESSEE HAS AGREED TO ADDITION DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE PENALTY HAS TO BE LE VIED. THE LD. SENIOR 8 8 D.R. FURTHER SUBMITTED THAT AS PER THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF MAK DATA PRIVATE LIMITED VS. C IT, 358 ITR 593, WHEREIN THE HON'BLE SUPREME COURT HAS HELD THAT WHE N THE ASSESSEE SURRENDERS THE INCOME TO AVOID LITIGATION, BUY PEAC E AND TO CHANNELIZE THE ENERGY AND RESOURCES TOWARDS PRODUCTIVE WORK AN D TO MAKE AMICABLE SETTLEMENT WITH THE INCOME TAX DEPARTMENT, THE STATUTE DOES NOT RECOGNIZE THESE TYPES OF DEFENCES UNDER EXPLANA TION 1 TO SECTION 271(1) OF THE ACT . VOLUNTARY DISCLOSURE DOES NOT RELEASE THE ASSESSEE FORM THE MISCHIEF OF PENAL PROCEEDINGS. IF THE SURR ENDER OF INCOME WAS NOT VOLUNTARY AND IF IT WAS MADE AFTER DETECTION BY THE ASSESSING OFFICER, THEN THE ASSESSEE IS LIABLE FOR PENALTY. 5. THE LD. AUTHORIZED REPRESENTATIVE HAS FILED WRITTEN SUBMISSION, WHICH READS AS UNDER :- A. THE ASSESSEE IS A COOPERATIVE BANK DOING THE BUSIN ESS OF BANKING. THE ASSESSEE FILED RETURN DECLARING THE IN COME OF RS 1,47,16,720/-- WITHOUT CLAIMING ANY DEDUCTION U/S 36(1)(VIIA). THIS WAS THE FIRST YEAR WHERE THE INCOME OF THE COO PERATIVE BANKS BECAME TAXABLE U/S 80P. THE ACCOUNTS ARE AUDI TED AND THE TAR WAS FILED. 9 9 THE RETURN WAS REVISED ON 27/03/2009, CLAIMING THE DEDUCTION OF RS 431.34 LAKHS U/S 36(1)(VIIA). THE SAID CLAIM WAS MADE ON THE BASIS OF THE LANGUAGE OF SAID SECTION AND THE D ECISION OF THE BANGALORE TRIBUNAL IN THE CASE OF SYNDICATE BANK. C OMPLETE DETAILS ABOUT THE ADVANCES BY VARIOUS BRANCHES INCL UDING THE COMPUTATION OF AGGREGATE AVERAGE ADVANCES WERE FILE D FOR CLAIMING SUCH A DEDUCTION. DURING THE ASSESSMENT PROCEEDING THE ASSESSEE BANK FILED A LETTER DATED 7/8 2009 (SET NO.1) REDUCING THE CLA IM MADE U/S 36(1)(VIIA). IT WAS STATED THAT THE ASSESSEE HA S MADE A PROVISION IN THE BOOKS OF ACCOUNTS TO THE TUNE OF RS 62.55 LAKHS AND FOLLOWING THE CBDT INSTRUCTION NO. 17 OF 26 NOVEMBER 2008, THE CLAIM IS REDUCED FROM 431.34 LAK HS TO 62.55 LAKHS. THIS LETTER WAS FILED ALONG WITH THE R EPLY TO THE QUERY LETTER DATED 8/09/2009 {SPECIFICALLY MENTIONED IN SET NO.1), AS PER THE INSTRUCTION OF THE LD ADDL. CIT . IN THIS QUERY LETTER DATED 08/09/2009 A GENERAL QUERY WAS RAISED ABOUT THE DEDUCTION U/S 36(1)(VIIA). DURING THE ASSESSMENT PROCEEDING ITSELF THE LD ADDL . CIT ASKED THE EXPLANATION, WHY NOT TO INITIATE THE PENALTY PR OCEEDINGS U/S 271(1)(C) FOR REVISING THE CLAIM U/S 36(1)(VIIA). THE ASSESSEE 10 10 BANK FILED THE DETAILED REPLY DATED 16.11.2009 EXPL AINING THE SITUATION UNDER WHICH CIRCUMSTANCES THE RETURN WAS REVISED AND THEN SUBSEQUENTLY THE CLAIM WAS REDUCED TO RS 6 2.55 LAKHS. THE LD AO AFTER DISCUSSING THE LETTER, CAME TO THE CONCLUSION TO INITIATE THE PENALTY PROCEEDING AFTER MENTIONING THAT 'IN THE LIGHT OF THE ABOVE DISCUSSION THERE IS SATISFACTION THAT THE ASSESSEE HAS MADE THE WRONG CLAIM BY REVIS ED RETURN (MAY BE BECAUSE THE CLAIM IS LEGALLY DEBATABLE ONE) ' THE LEARNED AO INITIATED THE PENALTY PROCEEDINGS, W ITH THE OBSERVATION THAT THE ASSESSEE HAS MADE A WRONG CLAI M BY REVISED RETURN (MAY BE BECAUSE THE CLAIM IS LEGALLY DEBATABLE ONE) .HE ACCORDINGLY LEVIED THE PENALTY OF RS 150 LAKHS ON THE GROUND THAT IN THE REVISED RETURN THE ASSESSEE HAS CLAIMED THE WRONG AND A WRONG CLAIM OF DEDUCTION U/S 36(1)(VIIA ) WAS NOT DEBATABLE. IN PARA 6.4 AND PARA 7 HE OBSERVED THAT THE ASSESSEE'S INTENTION TO EVADE TAX IS CLEAR BY FURNISHING THE INACCURATE PARTICULARS. IN APPEAL THE LD CIT(A) DELETED THE PENALTY CONSIDE RING THE NATURE OF THE CLAIM AS DEBATABLE ONE AND ALSO CONSI DERING THE FACT THAT THE CLAIM HAS BEEN REDUCED SUO MOTU. IT IS HUMBLY SUBMITTED THAT IN THE ASSESSMENT ORDER THE LD 11 11 ADDL CIT HAS CLEARLY MENTIONED THAT THE POINT IS D EBATABLE. ON AN INTERPRETATION OF THE STATUTE IF A CLAIM IS MADE THERE CANNOT BE ANY CONCEALMENT. ATTENTION IS DRAWN TO THE CASE OF CIT V/S RELIANCE PETRO PRODUCT, 322 ITR PAGE 158 AND CEMEN T MARKETING, 124 ITR PAGE 15 (SC) AND CIT V/S SPK ST EELS 156 ITR PAGE 270 (MP). WE WOULD LIKE TO BRING TO YOUR HONOUR'S KIND NOTICE THAT UNDER THE IDENTICAL SITUATIONS THE CLAIM HAS BEEN MADE U/ S 36(L)(VIIA) WHICH HAS BEEN DISALLOWED BY THE HON'BL E TRIBUNAL AGAINST WHICH THE APPEAL HAS BEEN ADMITTED BY THE H ON'BLE MP HIGH COURT. THIS CLEARLY PROVES THAT A LEGAL DE BATABLE CLAIM HAS BEEN MADE BY THE ASSESSEE AND THERE IS NO QUESTION OF ANY CONCEALMENT OR FURNISHING OF INACCU RATE PARTICULARS. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE HAD NOT CONCEALED ANY PARTICULARS OF INCOM E AND WE ARE OF THE VIEW THAT THE PENALTY CANNOT BE LEVIED. WE GET SUPPORT FROM THE DECISION OF RELIANCE PETRO PRODUCTS (P) LTD. (2010) 322 ITR 158 (SC). THE POSITION OF LAW REGARDING LEVY OF PENALTY U/S 2 71(1)(C) HAS UNDERGONE A SUBSTANTIAL CHANGE AFTER INSERTION OF E XPLANATION I TO 12 12 SECTION 271(1)(C) WITH EFFECT FROM 01.04.1976. EXPL ANATION 1 TO SECTION 271(1)(C) RAISES A PRESUMPTION THAT AS AND WHEN ANY AMOUNT IS ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME, THE SA ME SHALL BE DEEMED OR REPRESENT THE INCOME IN RESPECT OF WHICH THE PAR TICULARS HAVE BEEN CONCEALED. FURTHER WITH EFFECT FROM 10.9.1986 AMEND MENT HAS BEEN MADE TO EXPLANATION 1(B) TO SECTION 271(1)(C), AFTE R THIS AMENDMENT FURTHER ONUS HAS BEEN PLACED ON THE ASSESSEE TO PRO VE THAT EXPLANATION FURNISHED BY HIM WAS BONA FIDE. THE POS ITION NOW IS THAT UNLESS AND UNTIL THE ASSESSEE SUBSTANTIATES THE EXP LANATION AND PROVES THAT THE EXPLANATION WAS BONA FIDE, THE ADDI TION MADE TO HIS INCOME SHALL BE DEEMED TO REPRESENT THE CONCEALED I NCOME. ON ANALYSIS OF PROVISIONS OF SECTION 271(1)(C), IT IS OBSERVED THAT EXPLANATION 1 TO SECTION 271(1)(C) PROVIDES THE SIT UATION, WHERE NO EXPLANATION FOR THE FAILURE IS OFFERED BY THE ASSES SEE OR WHERE THE EXPLANATION THAT HAS BEEN OFFERED IS FOUND TO BE FA LSE OR WHERE THE ASSESSEE IS NOT ABOUT TO SUBSTANTIATE THE EXPLANATI ON OFFERED BY HIM. IN ALL THE CASES, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON SHALL BE DEEMED TO REPR ESENT THE INCOME IN RESPECT OF WHICH THE PARTICULARS HAVE BEEN CONCE ALED. AS PER PROVISO TO THIS EXPLANATION, THE ONUS TO ESTABLISH THAT EXP LANATION OFFERED WAS BONA FIDE AND FACTS RELATING TO SAME AND MATERIAL T O THE COMPUTATION 13 13 OF HIS INCOME EVEN DISCLOSED BY HIM WILL BE ON THE PERSONS CHARGED FOR CONCEALMENT. AS PER THE PROVISIONS 2 TO EXPLANATION 1(B) NOW TH E ENTIRE ONUS IS ON THE ASSESSEE TO NOT ONLY OFFER AN EXPLANATION BUT A LSO TO SUBSTANTIATE IT AND TO PROVE THAT THE PRESUMPTION WAS BONA FIDE. AT THE SAME TIME THE PRESUMPTION SO RAISED BY THE EXPLANATION 1 IS REBUT TABLE. THE EFFECT IS THAT UNLESS AND UNTIL REBUTS THE PRESUMPTION, HE WO ULD BE LIABLE TO PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. IT IS NOW ESTABLISHED LAW THAT PRESUMPTION WOULD NOT STAND REBUTTED MEREL Y BY FURNISHING ANY GENERAL OR FANTASTIC OR FANCIFUL OR UNREASONABL E EXPLANATION BY THE ASSESSEE, THE EXPLANATION SHOULD BE BASED ON COGENT AND RELEVANT MATERIAL AND SHOULD BE ACCEPTED TO THE AUTHORITIES. 7. THE EXPRESSION FURNISHING THE INACCURATE PARTICUL ARS OF INCOME HAS BEEN NOT DEFINED IN THE ACT. THE EXPRES SION INACCURATE REFERS TO NOT ONLY IN CONFORMITY WITH THE FACT OR T RUTH AND THAT IS AMENDMENT, WHICH IS RELEVANT IN THE CONTEXT OF FURN ISHING INACCURATE PARTICULARS. THE MEANING BY FURNISHING INACCURATE P ARTICULARS OF INCOME IMPLIES FURNISHING OF DETAILS OR INFORMATION ABOUT THE INCOME WHICH ARE NOT IN CONFORMITY WITH THE FACT OR TRUTH. THE DETAILS OR INFORMATION ABOUT INCOME DEALS WHICH ARE FACTUAL DE TAIL OF INCOME AND THIS CANNOT BE EXTENDED TO THE AREA, WHICH ARE SUBJ ECTIVE SUCH AS 14 14 STATUS OF TAXABILITY OF INCOME, ADMISSIBILITY OF DE DUCTION AND INTERPRETATION OF LAW. FURNISHING OF INACCURATE INF ORMATION, THUS, RELATES TO FURNISHING THE FACTUAL INCORRECT DETAILS AND INFORMATION ABOUT THE INCOME. THE ADMISSION OR REJECTION OF A C LAIM SUBJECT TO EXERCISE AND WHETHER THE CLAIM IS ACCEPTED OR REJEC TED HAS NOTHING TO DO WITH FURNISHING OF INACCURATE PARTICULARS OF INC OME. RAISING A LEGAL CLAIM, EVEN IF IT IS ULTIMATELY FOUND TO BE LEGALLY UNACCEPTABLE CANNOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF I NCOME. WE FIND THAT, IN THIS CASE, THE ASSESSEE HAS MADE A BONA FI DE LEGAL CLAIM, WHICH WAS NOT ACCEPTED BY THE TAX AUTHORITY OR JUD ICIAL AUTHORITY. WE FIND THAT THE ASSESSEES CLAIM WAS NOT ACCEPTED BY THE AUTHORITY, IT DOES NOT MEAN THAT THE ASSESSEE HAS FURNISHED INACC URATE PARTICULARS OF INCOME. THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. RAJASTHAN SPINNING AND WEAVING MILLS REPORTED IN (2009) 13 SCC 448, CONSIDERED THE EARLIER DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA AND ORS VS. DHARMENDRA TEXTILES PROCESSORS & ORS., REPORTED IN (2008) 306 ITR 277 (SC) AND HELD THAT IT GOES WITHOUT SAYING THAT FOR APPLICABILITY OF SECTION 271(L)(C) OF THE ACT, COND ITION STATED THEREIN MUST EXIST. THE ABOVE SAID DECISION CAME UP FOR CON SIDERATION IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RELIANCE PETROPRODUC TS 15 15 PVT., LTD., REPORTED IN (2010) 322 ITR 158 (SC). ON READING OF SECTION 271(1)(C) , THE HON'BLE SUPREME COURT POINTED OUT THAT IN ORDER TO BRING THE CASE UNDER SECTION 271(1)(C), TH ERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. IN ORDER TO EXPOSE THE ASSESSEE TO P ENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENA LTY PROVISION COULD NOT BE INVOKED. THUS, THE HON'BLE SUPREME COURT POI NTED OUT THAT A MERE MAKING OF CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WOULD NOT AMOUNT TO FURNISHING OF INACCURATE PARTIC ULARS REGARDING THE INCOME OF THE ASSESSEE. THE READING OF THE DECI SION OF THE HON'BLE SUPREME COURT REFERRED TO ABOVE, THUS POINT S OUT THAT FOR SUSTAINING PENALTY, THE BONA FIDE EXPLANATION OF TH E ASSESSEE MUST BE LOOKED AT, SO THAT THE CONTUMACIOUS CONDUCT OF T HE ASSESSEE FOR THE PURPOSE OF SUSTAINING THE PENALTY WOULD BE TAKE N AS CONDITION THAT IS THE MAIN REQUIREMENT UNDER SECTION 271(L)(C ) OF THE ACT. REFERRING TO THE DECISION IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS, (SUPRA), THE HON'BLE SUPREME COURT POINTED OUT THAT IN THE BACKGROUND OF SECTION 271(L)(C) OF THE ACT, THERE IS NO NECESSITY OF MENS REA BEING SHOWN BY THE REVENUE, HOWEVER REFERRING TO THE EXPLANATION TO SECTION 271(L)(C) P ENALTY BEING A 16 16 MULTIPLE LIABILITY, THE BONA FIDE OF THE CONDUCT OF THE ASSESSEE NECESSARILY ASSUMES SIGNIFICANT EVEN THOUGH WILLFUL NESS OF THE ASSESSEE MAY NOT BE A CRITERIA, THE CONDUCT IS TO B E CONSIDERED. THUS, A MERE FACT THAT THE ADDITION IN THIS CASE HAS BEEN SUSTAINED BY THIS COURT BY ITSELF WOULD NOT LEAD TO THE AUTOMATIC APP LICATION TO SECTION 271(L). WE, THEREFORE, DELETE THE PENALTY O F RS. 150 LAKHS. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 6 TH OCTOBER, 2015. S D / - (B. C. MEENA) ACCOUNTANT MEMBER S D / - ( D.T.GARASIA) JUDICIAL MEMBER DATED : 6 TH OCTOBER, 2015. CPU* 24