The Tax Publishers2020 TaxPub(DT) 0576 (Ahd-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Undisputedly, claim made by assessee on account of consolidated tax in profit and loss account was not false claim. As such, claim made by assessee was disallowed by the operation of law, i.e., under section 43B. But, same was eligible for deduction on payment basis in subsequent assessment year as payment made by assessee fell in the subsequent assessment year. Accordingly, such claim of assessee could be regarded as a wrong claim but same could not be equated with concealment of income or furnishing of inaccurate particulars of income and therefore, no penalty could be levied under section 271(1)(c).

Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - Wrong but no false claim -

Assessee claimed deduction of consolidated tax. AO disallowed deduction in view of section 43B.Held: Undisputedly, claim made by assessee on account of consolidated tax in profit and loss account was not false claim. As such, claim made by assessee was disallowed by the operation of law, i.e., under section 43B. But, same was eligible for deduction on payment basis in subsequent assessment year as payment made by assessee fell in the subsequent assessment year. Accordingly, such claim of assessee could be regarded as a wrong claim but same could not be equated with concealment of income or furnishing of inaccurate particulars of income and therefore, no penalty could be levied under section 271(1)(c).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-2011

INCOME TAX ACT, 1961

Section 271(1)(c)

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