Deduction reduced on account of interpretative process cannot be equated with furnishing of inaccurate particulars of Income, Penalty u/s 271(1)(c) will not sustain: ITAT [Read Order]
![Deduction reduced on account of interpretative process cannot be equated with furnishing of inaccurate particulars of Income, Penalty u/s 271(1)(c) will not sustain: ITAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2022/06/Deduction-income-penalty-ITAT-taxscan.jpeg "Deduction reduced on account of interpretative process cannot be equated with furnishing of inaccurate particulars of Income, Penalty u/s 271(1)(c) will not sustain: ITAT [Read Order]")
The Delhi bench of Income Tax Appellate Tribunal (ITAT) has held that deduction reduced on account of the interpretative process cannot be equated with the furnishing of inaccurate particulars of income and deleted the penalty u/s 271(1)(c) of the Income TaxAct,1961. The appellant challenged the order of CIT(A) imposing a penalty on the addition of Rs.1,44,794/- on account of Charity...
The Delhi bench of Income Tax Appellate Tribunal (ITAT) has held that deduction reduced on account of the interpretative process cannot be equated with the furnishing of inaccurate particulars of income and deleted the penalty u/s 271(1)(c) of the Income TaxAct,1961.
The appellant challenged the order of CIT(A) imposing a penalty on the addition of Rs.1,44,794/- on account of Charity and Donation and Rs.65,782/- on account of disallowance of part deduction 80IC.
The appellant company declared total income at Rs.11,98,36,555/- in which the Assessing Officer inter alia disallowed ‘repair and maintenance expenses’ at Rs.1,44,794/- on account of charity and donation and Rs.65,782/- on account of part deduction in Section 80IC and imposed penalty.
The Assessing Officer disallowed the claim of deduction under Section 80IC terming it to be incidental income which cannot be said to be ‘derived from’ manufacture or produce of any article or thing.The AO disallowed the claim based on the interpretation by the Supreme Court ofthe expression ‘derived from’.
Shri Pradip Kumar Kedia, AM & Shri Yogesh Kumar U S, JM observed that the disallowance of Rs.1,44,794/- was carried out on account of charity and donation, the same has not been incurred for charitable purposes. Further observed that there was no default contemplated under Section 271(1)(c) in respect of such addition and observed that the income reflected in the books may be attributable to the business undertaking but cannot be equated with the expression ‘derived from’ the manufacturing activity.
The Tribunal held that in the absence of culpability, the imposition of penalty owing to denial of deduction on interpretation will not sustain and allowed the appeal of the assessee.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
Gulshan Polyols Ltd. vs ACIT , 2022 TAXSCAN (ITAT) 799 , Shri Mithun Shete