The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the penalty under Section 271(1)(c) of the Income Tax Act 1961 holding that mere acceptance of disallowance could not conclude furnishing of inaccurate particulars of income.
The assessee, Gulab Impex Enterprises Pvt. was a resident corporate entity. On 03.11.2014, Security Appellate Tribunal, Mumbai upheld the decision of the Security Exchange Board of India (SEBI) imposing penalty on account of delay in compliance with Regulation 8(3) of SAST Regulations, 1997.
In the original return of income filed for the impugned assessment year on 24.11.2015 declaring income the assessee did not claim the above said amount as deduction towards expenses.
However, in the revised return of income, the assessee declared income after reducing the amount paid to SEBI. While completing the assessment, the Assessing Officer disallowed this claim on the ground that payment made, being in nature of penalty, was not allowable under Section 37(1) of the Income Tax Act.
The Assessing Officer imposed a penalty under Section 271(1)(c) of the Income Tax Act alleging that the assessee has furnished inaccurate particulars of income.
Ved Jain, appeared on behalf of the assessee and Pramod Kumar appeared on behalf of the revenue.
The two-member Bench of G.S. Pannu, (President) and Saktijit Dey, (Judicial Member) of ITAT deleted the penalty holding that merely because assessee had accepted the disallowance, it would not lead to the conclusion that the assessee had furnished inaccurate particulars of income.
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