INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Rejection of claim of HRA, whether to be construed as concealment of income - Validity of -

Assessee had claimed HRA deduction from his salary income. AO alleged assessee was also part owner of the property on which he had paid rent. Accordingly, HRA was disallowed and penalty under section 271(1)(c) was also imposed holding that deliberately furnished inaccurate particulars of his income to evade payment of tax. Held: There was no dispute that assessee was part owner of the house property for which he had paid rent to the other co-owners. It could not be said that assessee paid rent with mala fide intention to reduce his tax liability. The rent was actually paid to the co-owners and this fact was not disputed by AO. Merely because the claim of the assessee did not find any favour with the AO would not, ipso facto, become a bogus claim.

Followed:CIT v. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC) : 2010 TaxPub(DT) 1683 (SC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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