Principal Commissioner of Income-tax, Faridabad v. Piyush Colonizers Ltd
[Citation -2020-LL-0210-73]

Citation 2020-LL-0210-73
Appellant Name Principal Commissioner of Income-tax, Faridabad
Respondent Name Piyush Colonizers Ltd.
Court HIGH COURT OF PUNJAB & HARYANA
Relevant Act Income-tax
Date of Order 10/02/2020
Assessment Year 2008-09
Judgment View Judgment
Keyword Tags search and seizure • levy of penalty • incorrect claim • furnishing inaccurate particular of income • project completion method • percentage completion method
Bot Summary: If the Assessing Officer or the Commissioner or the Commissioner in the course of any proceedings under this Act, is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income, or There is no dispute on the fact that during the relevant assessment year, the assessee changed the accounting method from project completion to percentage method. In order to impose penalty under the said section, either there has to be concealed particulars of the income or furnishing of inaccurate particulars of the income. Secondly, the assessee must have furnished inaccurate particulars of his income. The Learned Counsel for Revenue suggested that by making incorrect claim for the expenditure on interest, the assessee has furnished inaccurate particulars of the income. The Learned Counsel argued that submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income. In Commissioner of Income Tax, Delhi Vs. Atul Mohan Bindal 2009(9) SCC 589, where this Court was considering the same provision, the Court observed that the Assessing Officer has to be satisfied that a person has concealed the particulars of his income or furnished inaccurate particulars of such income. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee.


ITA No. 300 of 2019 [1] IN HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 300 of 2019 Date of decision: 10.2.2020 Principal Commissioner of Income Tax, Faridabad Appellant v. M/s Piyush Colonizers 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. CIT (A) and Ld. ITAT have erred on facts and in law in deleting penalty of Rs. 1,26,39,400/- levied by Assessing Officer u/s 271(1)(c) of Act without MANOJ KUMAR properly appreciating facts of case and without 2020.02.14 10:50 I attest to accuracy and authenticity of this document High Court,Chandigarh ITA No. 300 of 2019 [2] specifying what was wrong with Assessing Officer's order as of why penalty was not leviable in this case? (ii) Ld. CIT (A) and Ld. ITAT has erred on facts and in law in deleting penalty levied by AO u/s 271(1)(c) of Income Tax Act, 1961 without appreciating fact that addition made by AO was confirmed to extent of Rs.1,85,92,817/- and assessee's intention was to withhold true particulars of income? (iii)On facts and in circumstances of case Ld. CIT (A) and Ld. ITAT have erred on facts and in law in deleting penalty levied by Assessing Officer u/s 271(1)(c) of Act disregarding facts that penalty is leviable on contravention of provisions of civil statute like Income Tax Act, there being so many judgments that breach of civil obligation attracts levy of penalty whether contravention was made by defaulters with any guilty intentions or not? (iv) On facts and in circumstances of case Ld. CIT (A) and Ld. ITAT have erred on facts and in law in deleting penalty especially without appreciating facts that assessee deliberately filed inaccurate particulars of income so as to reduce its tax liability? 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. proceedings concluded vide order MANOJ KUMAR 2020.02.14 10:50 I attest to accuracy and authenticity of this document High Court,Chandigarh ITA No. 300 of 2019 [3] dated 29.12.2009 by disallowing claim of indirect expenses thereby making addition of `9,56,65,810/-. In appeal, 1st Appellate Authority quashed disallowance of `7,70,72,993/- and addition was restricted to `1,85,92,817/-. For addition sustained, penalty proceedings were initiated under Section 271(1)(c) of Act and penalty of `1,26,39,400/- was imposed vide order dated 30.3.2012. 1st Appellate Authority set aside penalty vide order dated 31.3.2015. appeal filed by revenue was dismissed by Tribunal, hence present appeal. Learned counsel for revenue argued that 1st Appellate Authority erred in setting aside penalty, partial addition was sustained and hence penalty qua same was leviable. contention raised lacks merit. Section 271(1)(c) of Act is reproduced below: 271. (1) If Assessing Officer or Commissioner (Appeals) or Commissioner in course of any proceedings under this Act, is satisfied that any person (c) has concealed particulars of his income or furnished inaccurate particulars of such income, or There is no dispute on fact that during relevant assessment year, assessee changed accounting method from project completion to percentage method. It was result of change of method that certain indirect expenses claimed could not be allowed. account books of assessee were found to be duly audited and prepared in MANOJ KUMAR accordance with accepted accounting standard. change of accounting 2020.02.14 10:50 I attest to accuracy and authenticity of this document High Court,Chandigarh ITA No. 300 of 2019 [4] method was also duly disclosed by auditor. It was not case of revenue even before Appellate Authority that assessee had suppressed any material fact. At highest, case of revenue was that even though material was disclosed by assessee but he had claimed certain inadmissible expenses. Claiming of expense which is not sustainable in itself cannot be ground for invoking Section 271(1)(c) of Act. In order to impose penalty under said section, either there has to be concealed particulars of income or furnishing of inaccurate particulars of income. Rejection of claim that too where in facts of present case it was result of change of accounting method is not sufficient for penalising assessee. 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. 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. MANOJ KUMAR 2020.02.14 10:50 I attest to accuracy and authenticity of this document High Court,Chandigarh ITA No. 300 of 2019 [5] 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 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 MANOJ KUMAR 2020.02.14 10:50 I attest to accuracy and authenticity of this document High Court,Chandigarh ITA No. 300 of 2019 [6] 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 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. MANOJ KUMAR 2020.02.14 10:50 I attest to accuracy and authenticity of this document High Court,Chandigarh ITA No. 300 of 2019 [7] In view of facts of case and considering Apex Court decision, 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 Colonizers Ltd
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