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| The Tax Publishers2019 TaxPub(DT) 0854 (Del-Trib) INCOME TAX ACT, 1961
Section 271(1)(c)
Where particulars of expenditure incurred by the assessee had been accepted to be true and accurate, no penalty could be levied under section 271(1)(c) merely because rate of deduction was reduced.
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Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - Making of incorrect claim - No mala fide
AO allowed deduction at the rate of 100% as against 150% claimed by the assessee of total expenditure incurred on reseach and development. This resulted in addition and AO treated the same as furnishing of inaccurate particulars of income and accordingly, levied penalty under section 271(1)(c).Held: Merely because rate of deduction was reduced, it could not be said that claim of the assessee was mala fide or incorrect. AO had not doubted genuineness of expenditure incurred but only disputed whether the expenditure was incurred for normal business of manufacturing or for research work. Therefore, levy of penalty under section 271(1)(c) could not be sustained in view of the fact that particulars of expenditure incurred by the assessee had been accepted to be true and accurate.
Applied:Samtel India Ltd. [ITA No. 43/2017] : 2018 TaxPub(DT) 4215 (Del-HC) and Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC) : 2010 TaxPub(DT) 1683 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2005-06
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