Shaileshbhai Chandulal Kadecha,, JAMNAGAR v. The Income Tax Officer, Ward-1(2),, JAMNAGAR

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH SMC RAJKOT BEFORE SHRI A.L. GEHLOT (AM) I.T.A. NO. 1332/RJT/2010 (ASSESSMENT YEAR 1998-99) SHAILESHBHAI CHANDULAL KADECHA VS THE IT WD.1(2) CHANDI BAZAR BUGDOW JAMNAGAR JAMNAGAR PAN : AENPK3031L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DR ADHIA RESPONDENT BY: SHRI JAI RAJ KUMAR O R D E R A.L. GEHLOT : THIS APPEAL BY ASSESSEE IS DIRECTED A GAINST THE ORDER OF CIT(A) JAMNAGAR DATED 27-10-2010. 2. THE GROUND RAISED IN THE APPEAL IS IN RESPECT OF LEVY OF PENALTY OF RS. 14 250 U/S 271(1)(C) OF THE ACT THE ASSESSING OFF ICER LEVIED PENALTY IN RESPECT OF ADDITION OF RS.12 053 AND RS.11 712 TOWARDS ADDITIO N IN RESPECT OF INTEREST INCOME FROM SAVINGS BANK ACCOUNT AND ACCRUED INTERE ST WITH POST OFFICE. AN ADDITION OF RS.17 182 WAS ALSO MADE TOWARDS DISALLO WANCE OF DEDUCTION U/S 80C IN RESPECT OF MUTUAL FUND INVESTMENT. THE PENALTY LEVIED BY THE ASSESSING OFFICER HAS BEEN CONFIRMED BY THE CIT(A). 2. AFTER HEARING THE LEARNED REPRESENTATIVES OF THE PARTIES I FIND THAT THE ADDITION OF RS.12 053 AND RS.11 712 ON ACCOUNT OF I NTEREST FROM SAVINGS BANK AND POST OFFICER HAS BEEN MADE BY THE ASSESSING OFF ICER. ANOTHER ADDITION OF RS.17 182 WAS MADE ON ACCOUNT OF CLAIM OF DEDUCTION U/S 80C IN RESPECT OF INVESTMENT IN MUTUAL FUNDS. I FIND THAT IN RESPECT OF ADDITION IN QUANTUM MATTER THE ASSESSING OFFICER MAY BE CORRECT BUT IN RESPECT OF PENALTY U/S 271(1)(C) OF THE ACT WHICH IS APPLICABLE ONLY IN CASES WHERE THE ASS ESSING OFFICER IS SATISFIED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT TH E ASSESSEE HAS CONCEALED ITA NO.1332/RJT/2010 2 THE PARTICULARS OF HIS INCOME OR HAS FURNISHED INAC CURATE PARTICULARS OF SUCH INCOME. I FIND THAT ABOVE ALL ADDITIONS OR DISALLO WANCE OF DEDUCTION U/S 80C IS BASED ON THE PARTICULARS FURNISHED BY THE ASSESSEE. THERE IS NO MATERIAL ON RECORD ON THE BASIS OF WHICH IT CAN BE SAID THAT TH E PARTICULARS FURNISHED BY THE ASSESSEE WAS INACCURATE OR THE ASSESSEE HAS CONCEAL ED THE PARTICULARS. THE ASSESSING OFFICER IS DUTY BOUND TO MAKE ALLOWANCE O R DISALLOWANCE OF DEDUCTION OR ACCRUAL OF INTEREST OUT OF THE PARTICULARS FURNI SHED BY THE ASSESSEE. WHEN THE ASSESSING OFFICER DETERMINED THE CORRECT INCOME ON THE BASIS OF PARTICULARS FILED BY THE ASSESSEE SUCH CASE CANNOT BE A CASE WHERE PE NALTY U/S 271(1)(C) OF THE ACT IS APPLICABLE. IN THE LIGHT OF VARIOUS DECISIO NS OF ITAT HIGH COURTS AND THE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PV T LTD 322 ITR 158 (SC) I CANCEL THE PENALTY. 3. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13-01-2011. (A.L. GEHLOT) ACCOUNTANT MEMBER RAJKOT DT : 13 TH JANUARY 2011 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) JAMNAGAR 4. THE CIT JAMNAGAR 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT