ITA No. 346 of 2019 [1] IN HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 346 of 2019 Date of decision: 10.2.2020 Principal Commissioner of Income Tax, Faridabad Appellant v. M/s Piyush Buildwell India Ltd. Respondent CORAM: HON'BLE MR. JUSTICE AJAY TEWARI HON'BLE MR. JUSTICE AVNEESH JHINGAN Present: Mr. Tajender K. Joshi, Senior Panel Counsel with Mr. Vikram Bali, Junior Panel Counsel for appellant. AVNEESH JHINGAN, J. revenue is in appeal under Section 260A of Income Tax Act, 1961 (for short, 'the Act') against order dated 28.12.2018 passed by Income Tax Appellate Tribunal, New Delhi (for short, 'the Tribunal') claiming following substantial questions of law: (i) On facts and in circumstances of case Ld. ITAT has erred on facts and in law by upholding decision of Ld. CIT (A) and in deleting penalty of Rs. 2,94,64,260/- levied by Assessing Officer u/s 271(1) (c) of Act by holding that impugned penalty is pre- mature and hence unable to sustain same? (ii) On facts and in circumstances of case Ld. ITAT has erred on facts and in law by upholding MANOJ KUMAR 2020.02.14 10:50 I attest to accuracy and decision of Ld. CIT (A) and in deleting penalty levied authenticity of this document High Court,Chandigarh ITA No. 346 of 2019 [2] by holding that Assessing Officer has erred in levying penalty on entire amount of disallowance as was originally disallowed by Assessing Officer when Ld. CIT(A) had held that assessee was eligible for proportionate deduction especially when no quantum of proportionate deduction were quantified while deciding appeal. (iii) On facts and in circumstances of case Ld. ITAT has erred in deleting penalty when it is matter of claim of exemption or deduction under Act, heavy onus is placed on assessee. By claiming inaccurate deduction to reduce tax liability tantamounts to furnishing inaccurate particulars of income. (iv) On facts and in circumstances of case Ld. ITAT has erred on facts and in law in deleting penalty especially without going into Explanation 5A(ii) to Section 271(1)(c) of Act? relevant facts are that assessment year involved is 2008-09. search and seizure was conducted at administrative office of Piyush Group of Companies and residential premises of Director were also searched on 16.1.2008. In proceedings under Section 153A of Act, vide order dated 29.12.2009 addition of `8,66,85,809/- was made by disallowing claim of assessee made under Section 80IB of Act. Further, addition of `1,84,32,854/- was made by disallowing other MANOJ KUMAR expenses. In appeal filed, 1st Appellate Authority remanded 2020.02.14 10:50 I attest to accuracy and authenticity of this document High Court,Chandigarh ITA No. 346 of 2019 [3] matter back holding that assessee was eligible for proportionate deduction under Section 80IB of Act taking into consideration residential unit having area less than 1000 square feet. Assessing Officer was to verify factual position, however due to non-verification, addition was sustained by Assessing Officer. Penalty of `2,94,64,260/- under Section 271(1)(c) of Act was imposed on 30.3.2012 for amount of deductions disallowed. In appeal, 1st Appellate Authority deleted penalty on 31.3.2015. appeal of revenue was dismissed by Tribunal, hence present appeal. Learned counsel for revenue argued that 1st Appellate Authority erred in setting aside penalty as partial addition was sustained and hence penalty qua same was leviable. contention raised lacks merit. claim of assessee under Section 80IB of Act was rejected by holding that flats were situated within 25 kilometers from municipal limits of Delhi and built up area was more than 1000 square feet. said order was set aside and matter was remitted back for allowing proportionate deduction vis-a-vis residential unit having less than 1000 square feet area. It was only as result of non-verification of factual aspect that addition was again made. assessee had disclosed particulars and deduction was claimed in return. It is also not disputed that there were details before Assessing Officer to prove that assessee had constructed two bed room units. In view of findings recorded by authorities, dispute boiled down that assessee was entitled to proportionate deduction under Section 80IB of Act, whereas he had claimed full deduction. Even MANOJ KUMAR 2020.02.14 10:50 I attest to accuracy and authenticity of this document High Court,Chandigarh ITA No. 346 of 2019 [4] though ultimately due to non-verification of factual aspect proportionate relief could not be given by Assessing Officer. present case does not fall within ambit of Section 271 (1)(c) of Act. claiming of deduction which ultimately was not sustainable will not itself amount to furnishing of inaccurate particulars. Supreme Court in C.I.T. Ahmedabad v. Reliance Petroproducts, 2010 (322) ITR 158 dealt with Section 271(1)(c) of Act and held as under: 7. .......A glance at this provision would suggest that in order to be covered, there has to be concealment of particulars of income of assessee. Secondly, assessee must have furnished inaccurate particulars of his income. Present is not case of concealment of income. That is not case of Revenue either. However, Learned Counsel for Revenue suggested that by making incorrect claim for expenditure on interest, assessee has furnished inaccurate particulars of income. As per Law Lexicon, meaning of word "particular" is detail or details (in plural sense); details of claim, or separate items of account. Therefore, word "particulars" used in Section 271(1)(c) would embrace meaning of details of claim made. It is admitted position in present case that no information given in Return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, assessee cannot be held guilty of furnishing MANOJ KUMAR 2020.02.14 10:50 I attest to accuracy and authenticity of this document High Court,Chandigarh ITA No. 346 of 2019 [5] inaccurate particulars. Learned Counsel argued that "submitting incorrect claim in law for expenditure on interest would amount to giving inaccurate particulars of such income". We do not think that such can be interpretation of concerned words. words are lain and simple. In order to expose assessee to penalty unless case is strictly covered by provision, penalty provision cannot be invoked. By any stretch of imagination, making incorrect claim in law cannot tantamount to furnishing inaccurate particulars. In Commissioner of Income Tax, Delhi Vs. Atul Mohan Bindal [2009(9) SCC 589], where this Court was considering same provision, Court observed that Assessing Officer has to be satisfied that person has concealed particulars of his income or furnished inaccurate particulars of such income. This Court referred to another decision of this Court in Union of India Vs. Dharamendra Textile Processors [2008(13) SCC 369], as also, decision in Union of India Vs.Rajasthan Spg. & Wvg. Mills [2009(13) SCC 448] and reiterated in para 13 that:- "13. It goes without saying that for applicability of Section 271(1)(c) conditions stated therein must exist." 9. We are not concerned in present case with mens rea. However, we have to only see as to whether in this case, as matter of fact, assessee has given inaccurate particulars. In MANOJ KUMAR 2020.02.14 10:50 I attest to accuracy and authenticity of this document High Court,Chandigarh ITA No. 346 of 2019 [6] Webster's Dictionary, word "inaccurate" has been defined as:- "not accurate, not exact or correct; not according to truth; erroneous; as inaccurate statement, copy or transcript". We have already seen meaning of word "particulars" in earlier part of this judgment. Reading words in conjunction, they must mean details supplied in Return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by assessee in its Return were found to be incorrect or erroneous or false. Such not being case, there would be no question of inviting penalty under Section 271(1)(c) of Act. mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding income of assessee. Such claim made in Return cannot amount to inaccurate particulars. In view of facts of case and considering decision cited above, no interference is warranted in deletion of penalty. appeal is dismissed. (AVNEESH JHINGAN) (AJAY TEWARI) JUDGE JUDGE 10.2.2020 mk Whether speaking/reasoned: Yes/No Whether reportable: Yes/No MANOJ KUMAR 2020.02.14 10:50 I attest to accuracy and authenticity of this document High Court,Chandigarh Principal Commissioner of Income-tax, Faridabad v. Piyush Buildwell India Ltd