The Tax Publishers2021 TaxPub(DT) 0934 (Del-HC)

INCOME TAX AACT, 1961

Section 271(1)(c)

Where in respect of exemption claimed by assessee-trust under section 11, no evidence by revenue had been brought on record to adduce that furnishing of inaccurate details had been done by assessee willfully, in order to avoid the payments of tax, or to conceal the particulars of income, penalty proceedings initiated under section 271(1)(c) was required to be deleted.

Penalty under section 271(1)(c) - Furnishing of inaccurate particulars of income - Disallowance of exemption claimed under section 11 -

AO initiated penalty proceedings holding that assessee had furnished inaccurate particulars of income by claiming exemption under section 11, in respect of the business which was not incidental to the objects of assessee-trust, and that the said mistake could not have been said to be a bona fide one. Held: It was clear that the penalty proceedings were initiated as an outcome of the assessment proceedings, which was still being debated upon. If the issue is debatable, penalty proceedings cannot lie. Further, there was no finding that any details supplied by the assessee in its return were found to be incorrect, erroneous or false. In fact, as noted in the impugned order, no evidence by revenue had been brought on record to adduce that furnishing of inaccurate details had been done by assessee willfully, in order to avoid the payments of tax, or to conceal the particulars of income. Thus, in the facts and circumstances of the case, penalty proceedings initiated was required to be deleted.

REFERRED :

FAVOUR : In favour of assessee.

A.Y. :



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