ITO, New Delhi v. M/s International Academy of Insurance & Financial Management (P) Ltd., New Delhi

ITA 1472/DEL/2011 | 2006-2007
Pronouncement Date: 17-02-2012 | Result: Dismissed

Appeal Details

RSA Number 147220114 RSA 2011
Assessee PAN AABCI3132R
Bench Delhi
Appeal Number ITA 1472/DEL/2011
Duration Of Justice 10 month(s) 23 day(s)
Appellant ITO, New Delhi
Respondent M/s International Academy of Insurance & Financial Management (P) Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 17-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 17-02-2012
Date Of Final Hearing 13-02-2012
Next Hearing Date 13-02-2012
Assessment Year 2006-2007
Appeal Filed On 24-03-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI C BENC H BEFORE SHRI R.P. TOLANI JM & SHRI A.N. PAHUJA AM ITA NO.1472/DEL/2011 ASSESSMENT YEAR:2006-07 INCOME TAX OFFICER WARD 11(4) ROOM NO.324 C.R. BUILDING IP ESTATE NEW DELHI V/S . M/S INTERNATIONAL ACADEMY OF INSURANCE & FINANCIAL MANAGEMENT (P) LTD. 103-A ASHOKA ESTATE BARAKHAMBA ROAD NEW DELHI [PAN : AABCI 3132 R] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI AKHILESH GUPTA AR REVENUE BY MS.RENUKA JAIN GUPTA DR DATE OF HEARING 13-02-2012 DATE OF PRONOUNCEMENT 17-02-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 24 TH MARCH 2011 BY THE REVENUE AGAINST AN ORDER DATED 13 TH JANUARY 2011 OF THE LEARNED CIT(A)-XXX NEW DELHI RAISES THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE PENALTY OF ` `12 96 013/- IMPOSED U/S 271(1)(C) OF THE INCOME-TAX ACT 1961 VIDE ASSESSING OFFICERS ORDER DATED 08.06.2009. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AN D IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATI NG THE FACTS THAT ASSESSEE HAS AGREED TO REVISE ITS COMPUTATION ONLY AFTER IT WAS SHOW CAUSED DURING TH E COURSE OF ASSESSMENT PROCEEDINGS. 3. THE APPELLANT CRAVES LEAVE TO ADD ALTER OR AMEN D ANY GROUND OF THE APPEAL RAISED ABOVE AT THE TIME OF HEARING. ITA NO.1472/DEL./2011 2 2. FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THA T RETURN DECLARING NIL INCOME FILED ON 30.10.2006 BY THE ASSESSEE PROVIDI NG EDUCATION AND TRAINING FOR PROFESSIONALS IN INSURANCE AND FINANCE SECTOR WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE INCOME-TAX AC T 1961 (HEREINAFTER REFERRED TO AS THE ACT) ISSUED ON 26 TH OCTOBER 2007. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER (A.O. IN SHORT) NOTICED ON PERUSAL OF ANNEXURE-2 MENTIONED IN CLAUSE 22(B) OF THE TAX AUD IT REPORT IN FORM 3CD THAT THE FOLLOWING PRIOR PERIOD EXPENSES TOTALING TO ` `36 14 178/- WERE DEBITED BY THE ASSESSEE UNDER THE DIFFERENT HEADS IN THE PROFIT AN D LOSS ACCOUNT FOR THE PERIOD ENDED 31.03.2006 RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION: S.NO. PARTICULARS AMOUNT (IN ` `) 1. TRAVELING CONVEYANCE HOTEL BOARDING EXPENSES 19 95 305 2. TELEPHONE POSTAGE & COURIER EXPENSES 2 54 729 3. FEE & SUBSCRIPTION 3 98 372 4. PRINTING & STATIONERY 1 42 815 5. SALES PROMOTION EXPENSES 33 360 6. BOOKS & PERIODICAL 740 7. MISC. EXPENSES 71 148 8. WEB DESIGN 1 04 972 9. COMPUTER RUNNING EXPENSES 30 14 178 TOTAL 36 14 178 2.1 SINCE THE ASSESSEE DID NOT ADD BACK AFORESAID PRIOR PERIOD EXPENSES IN THE COMPUTATION OF INCOME THE AO ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY THESE BE NOT DISALLOWED. IN RESPO NSE THE ASSESSEE SUBMITTED THAT THE RETURN FILED ORIGINALLY CONTAINED SOME CLE RICAL MISTAKES. ACCORDINGLY THE ASSESSEE REVISED THE COMPUTATION OF INCOME ADDING BACK THE AFORESAID AMOUNT OF ` 36.14 LACS BESIDES DISALLOWING AN AMOUNT OF ` `2 17 344/- U/S 40(A) OF THE ACT AND CLAIMING HIGHER DEPRECIATION. THE AO WHILE ACCE PTING THE REVISED COMPUTATION OF INCOME ADDED ANOTHER AMOUNT OF ` 7 000/- TOWARDS CHARITY AND DONATION AND ASSESSED LOSS OF ` 3 60 884/- AS AGAINST LOSS OF ` 3 67 884/- IN THE REVISED COMPUTATION OF INCOME.. INTER ALIA THE AO CONCLUDED THAT ADMISSION BY THE ASSESSEE OF AFORESAID CLERICAL MISTAKES ON BEI NG CONFRONTED IMPLIES THAT THE ITA NO.1472/DEL./2011 3 ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME IN THE RETURN FILED ORIGINALLY. ACCORDINGLY THE AO INITIATED THE PENALTY PROCEEDIN GS U/S 271(1)(C) OF THE ACT IN RESPONSE TO A SHOW CAUSE NOTICE DATED 6 TH FEBRUARY 2009 BEFORE LEVY OF PENALTY THE ASSESSEE SUBMITTED WRITTEN SUBMISSIONS VIDE LET TER DATED 2 ND JUNE 2009. AFTER CONSIDERING THE DETAILED REPLY OF THE ASSESS EE THE AO LEVIED PENALTY OF ` ` 12 96 013/- @100% OF THE TAX SOUGHT TO BE EVADED ON THE INCOME AS A RESULT OF AFORESAID DISALLOWANCES OF ` ` 36 14 178/- AND ` ` 2 17 344/- ON THE GROUND THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF IN COME. 3. ON APPEAL THE LEARNED CIT(A) CANCELLED THE PEN ALTY HOLDING AS UNDER:- 6. I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE APPELLANT AND THE ORDER OF THE AO AND THE CASE LAWS CITED BY THE APPELLANT. THE APPELLANT HAD NOT CONCEALED ANY OF THE INCOME. I FIND SUPPORT FROM SUBMISSION OF THE APPELLANT THAT SINCE IT WAS THE FIRST YEAR WHEN THE NEW PROCEDURE OF ON LINE FILING OF RETURN OF INCOME WAS INTRODUCED AND THERE WERE SOME CONFUSION ON THE COR RECT FILING OF FIGURES IN THE RETURN FORM THERE WERE SOME MISTAKE S DONE BY THE APPELLANT WHILE FILING THE INCOME TAX RETURN. FURT HER THE APPELLANT DID NOT EVEN CORRECTLY CLAIM THE DEPRECIATION WHIC H IT WAS RIGHTLY ELIGIBLE FOR AND CLAIMED ONLY A SMALL AMOUNT ONLY S HOWS THAT THERE WERE MISTAKES THAT WERE NOT INTENDED AND INTENTIONS WERE NOT MALA FIDE. AS SOON AS THE APPELLANT COMPANY NOTICED THE MISTAKE THE ASSESSEE COMPANY ON ITS OWN FURNISHED THE CORRECT C OMPUTATION OF INCOME TAKING INTO ACCOUNT ALL DISALLOWANCES AND CO RRECT DEPRECIATION WHICH SHOULD HAVE BEEN ADJUSTED. RES PECTFULLY FOLLOWING THE CASE LAWS CITED BY THE APPELLANT I A M OF THE OPINION THAT /THE PENALTY LEVIED BY THE ASSESSING OFFICER I S NOT JUSTIFIED AS THE ASSESSING OFFICER HAS NOT FOUND THE EXPLANATION OFFERED BY THE APPELLANT TO BE NOT BONAFIDE AND ALL THE FACTS RELA TING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HER TOTAL INCOME HAS BEEN DISCLOSED BY THE APPELLANT. THE CASE OF RELIANCE P ETRO PRODUCTS (P) LTD. OF HONOURABLE SUPREME COURT REPORTED IN (3 22 ITR 158)(SUPREME COURT) FINDS IN FAVOUR OF ASSESSEE. M ERE TECHNICAL MISTAKES IN COMPUTATION OF INCOME FROM ALREADY AUDI TED P&L A/CS & BALANCE SHEET FORMING PART OF TAX AUDIT REPORT WILL NOT PENALIZE THE ASSESSEE FOR CONCEALMENT OF INCOME U/S 271(1)(C). ACCORDINGLY THIS IS NOT A CASE OF IMPOSITION OF PENALTY U/S 271 (1)(C). THE PENALTY IMPOSED BY THE ASSESSING OFFICER IS THEREFORE DEL ETED. ITA NO.1472/DEL./2011 4 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. DR SUPPORTED T HE ORDER OF THE AO WHILE THE LD. AR ON BEHALF OF THE ASSESSEE RELIED UPON THE FINDIN GS OF LD. CIT(A) IN THE IMPUGNED ORDER. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE TH ROUGH THE FACTS OF THE CASE. AS IS APPARENT FROM THE AFORESAID FACTS THE ASSESSEE CLAIMED DEDUCTION OF PRIOR PERIOD EXPENSES MENTIONE D IN THE TAX AUDIT REPORT IN THE PROFIT AND LOSS ACCOUNT. TO A QUERY BY THE AO THE ASSESSEE WHILE ADMITTING CLERICAL MISTAKES RE VISED THE COMPUTATION OF INCOME ADDING BACK THE AMOUNT OF ` ` 36.14 LACS BESIDES DISALLOWING AN AMOUNT OF ` `2 17 344/- U/S 40(A) OF THE ACT. THE AO WHILE ACCE PTING THE REVISED COMPUTATION OF INCOME ADDED ANOTHER AMOUNT OF ` 7 000/- TOWARDS CHARITY AND DONATION AND ASSESSED LOSS OF ` 3 60 884/- .INTER ALIA PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED . SUBSEQUEN TLY THE AO LEVIED A PENALTY OF ` .12 96 013/-U/S 271(1)(C) OF THE ACT ON THE GROUN D THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF IN COME IN THE ORIGINAL RETURN HAVING NOT OFFERED THE AMOUNT OF 3 8 31 522/- [36 14 178+2 17 344] FOR DISALLOWANCE. ON APPEAL T HE LD. CIT(A) CANCELLED THE PENALTY ON THE GROUND THAT IT WAS THE FIRST YEAR WHEN THE NEW PROCEDURE OF ON LINE FILING OF RETURN WAS INTR ODUCED AND DUE TO CONFUSION MISTAKES WERE COMMITTED BY THE ASSESSEE WHILE FILI NG THE RETURN INTER ALIA IN CLAIMING DEPRECIATION. IMMEDIATELY WHEN THE AO POIN TED OUT MISTAKES THE ASSESSEE REVISED THE COMPUTATION OF INCOME .ACCORD INGLY WHILE ACCEPTING THE EXPLANATION OF THE ASSESSEE BONAFIDE AND ALL THE FA CTS MATERIAL TO THE COMPUTATION OF TOTAL INCOME HAVING BEEN DISCLOSED BY THE ASSESSEE THE LD. CIT(A) WHILE REFERRING TO DECISION IN RELIANCE PETR O PRODUCTS (P) LTD.(SUPRA) CANCELLED THE PENALTY. NOT EVEN A WHISPER HAS BEEN MADE IN THE PENALTY ORDER AS TO WHICH SPECIFIC PARTICULARS WERE FURNISH ED INACCURATE OR WERE CONCEALED. THE EXPRESSION 'HAS CONCEALED THE PARTICULARS OF INCOME' AND 'HAS FURNISHED INACCURATE PARTICULARS O F INCOME' HAVE ITA NO.1472/DEL./2011 5 NOT BEEN DEFINED EITHER IN SECTION 271 OR ELSEWHERE IN THE ACT. HOWEVER NOTWITHSTANDING THE DIFFERENCE IN THE TWO CIRCUMSTANCES IT IS NOW WELL ESTABLISHED THAT THEY LEAD TO THE SAME EFFECT NAMELY KEEPING OFF A CERTAIN PORTION OF THE INCOME FROM TH E RETURN. ACCORDING TO LAW LEXICON THE WORD 'CONCEAL' MEANS: 'TO HIDE OR KEEP SECRET. THE WORD 'CONCEAL' IS CO N+CELARE WHICH IMPLIES TO HIDE. IT MEANS TO HIDE OR WITHDRAW FROM OBSERVATION; TO COVER OR KEEP FROM SIGHT; TO PREVEN T THE DISCOVERY OF ; TO WITHHOLD KNOWLEDGE OF. THE OFFENC E OF CONCEALMENT IS THUS A DIRECT ATTEMPT TO HIDE AN I TEM OF INCOME OR A PORTION THEREOF FROM THE KNOWLEDGE OF T HE INCOME- TAX AUTHORITIES.' IN WEBSTER'S DICTIONARY 'INACCURATE' HAS BEEN DEFI NED AS : 'NOT ACCURATE NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS ; AS AN INACCURATE STATEMENT COPY OR TRA NSCRIPT.'. 5.1. THE PENALTY U/S 271(1)(C) OF THE ACT IS LE VIABLE IF THE AO IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER TH E ACT THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS WELL S ETTLED THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT AND AS HELD BY HON'BLE SUPREME COURT IN TH E CASE OF ANANTHRAMAN VEERASINGHAIAH & CO. VS. CIT 123 ITR 4 57 THE FINDINGS IN THE ASSESSMENT PROCEEDINGS CANNOT BE RE GARDED AS CONCLUSIVE FOR THE PURPOSES OF THE PENALTY PROCEEDI NGS. IT IS ALSO WELL SETTLED THAT THE CRITERION AND YARDSTICKS FOR THE PURPOSE OF IMPOSING PENALTY U/S 271(1)(C) OF THE ACT ARE DIFF ERENT THAN THOSE APPLIED FOR MAKING OR CONFIRMING THE ADDITIONS. IT IS THEREFORE NECESSARY TO REAPPRECIATE AND RECONSIDER THE MATTER SO AS TO FIND OUT AS TO WHETHER THE ADDITION OR DISALLOWANCE MADE IN THE QUANTUM PROCEEDINGS ACTUALLY REPRESENTS THE CONCEALMENT ON THE PART OF THE ASSESSEE AS ENVISAGED IN SEC. 271(1 )(C) OF THE ACT AND WHETHER IT IS A FIT CASE TO IMPOSE THE PENALTY BY INVOKING THE SA ID PROVISIONS. THE ITA NO.1472/DEL./2011 6 PROVISIONS OF SECTION 271(1)(C) OF THE ACT STIPULA TE THAT IF THE ASSESSING OFFICER OR THE CIT(APPEALS) OR THE COMMIS SIONER IN THE COURSE OF PROCEEDINGS UNDER THIS ACT IS SATISFIED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURN ISHED INACCURATE PARTICULARS THEREOF HE MAY DIRECT THAT SUCH PERS ON SHALL PAY BY WAY OF PENALTY A SUM WHICH SHALL NOT BE LESS THAN BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY A REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INC OME. EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT MENTIONS THAT WHE RE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THE ACT SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE AO OR T HE CIT (APPEALS) OR THE COMMISSIONER TO BE FALSE OR SUCH PERSON OFF ERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE A ND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOT AL INCOME HAVE BEEN DISCLOSED BY HIM THEN THE AMOUNT ADDED OR DIS ALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESU LT THEREOF SHALL FOR THE PURPOSE OF CLAUSE (C) OF SECTION 271(1) B E DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. IN OTHER WORDS THE NECESSARY INGREDIEN TS FOR ATTRACTING EXPLANATION 1 TO SECTION 271(1)(C) ARE THAT (I) THE PERSON FAILS TO OFFER THE EXPLANATION OR (II) HE OFFERS THE EXPLANATION WHICH IS FOUND BY TH E AO OR THE CIT (APPEALS) OR THE COMMISSIONER TO BE FALSE OR (III) THE PERSON OFFERS EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE A ND THAT ALL THE FACTS RELATING TO THE SAME HAVE BEEN DISCLOSED BY HIM. 5.2 IF THE CASE OF ANY ASSESSEE FALLS IN ANY OF THESE THREE CATEGORIES THEN THE DEEMING PROVISION PROVIDED IN EXPLANATION 1 TO ITA NO.1472/DEL./2011 7 SECTION 271(1)(C) COME INTO PLAY AND THE AMOUNT AD DED OR DISALLOWED IN COMPUTING THE TOTAL INCOME SHALL BE C ONSIDERED AS THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CO NCEALED FOR THE PURPOSES OF CLAUSE (C) OF SECTION 271(1) AND THE P ENALTY FOLLOWS. ON THE OTHER HAND IF THE ASSESSEE IS ABLE TO OFFER A N EXPLANATION WHICH IS NOT FOUND BY THE AUTHORITIES TO BE FALSE AND ASSESSEE HAS BEEN ABLE TO PROVE THAT SUCH EXPLANATION IS BONA FI DE AND THAT ALL THE FACTS RELATING TO THE SAME HAVE BEEN DISCLOSED BY HIM THE ASSESSEE SHALL BE OUT OF THE CLUTCHES OF EXPLANATIO N 1 TO SECTION 271(1)(C) OF THE ACT AND IN THAT CASE THE PENALTY SHALL NOT BE IMPOSED. IN THE INSTANT CASE THE ASSESSEE OFFERED AN EXPLANATION WHICH HAS NOT BEEN FOUND TO BE FALSE. THE LD. CIT(A ) CONCLUDED THAT EXPLANATION OF THE ASSESSEE WAS BONAFIDE AND ALL TH E FACTS MATERIAL TO COMPUTATION OF INCOME WERE DISCLOSED BY THE ASSE SSEE. IN THIS CONNECTION HONBLE SUPREME COURT IN THE CASE OF DI LIP N. SHROFF V. JT. CIT [2007] 210 CTR (SC) 228 : [2007] 291 ITR 51 9 (SC) WHILE CONSIDERING THE SCOPE OF THE PROVISIONS U/S 271(1 )( C) OF THE ACT OBSERVED IN THE FOLLOWING TERMS: THE LEGAL HISTORY OF SECTION 271(1)(C) OF THE ACT TRACED FROM THE 1922 ACT PRIMA FACIE SHOWS THAT THE EXPLAN ATIONS WERE APPLICABLE TO BOTH THE PARTS. HOWEVER EACH CA SE MUST BE CONSIDERED ON ITS OWN FACTS. THE ROLE OF THE EXPLAN ATION HAVING REGARD TO THE PRINCIPLE OF STATUTORY INTERPR ETATION MUST BE BORNE IN MIND BEFORE INTERPRETING THE AFOREMENTI ONED PROVISIONS. CLAUSE (C) OF SUB-SECTION (1) OF SECTIO N 271 CATEGORICALLY STATES THAT THE PENALTY WOULD BE LEVI ABLE IF THE ASSESSEE CONCEALS THE PARTICULARS OF HIS INCOME OR FURNISHES INACCURATE PARTICULARS THEREOF. BY REASON OF SUCH C ONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS ALONE THE ASSESSEE DOES NOT IPSO FACTO BECOME LIABLE FOR PENALTY. IMPO SITION OF PENALTY IS NOT AUTOMATIC. LEVY OF PENALTY IS NOT ON LY DISCRETIONARY IN NATURE BUT SUCH DISCRETION IS REQU IRED TO BE EXERCISED ON THE PART OF THE ASSESSING OFFICER KEEP ING THE RELEVANT FACTORS IN MIND. SOME OF THOSE FACTORS APA RT FROM BEING INHERENT IN THE NATURE OF PENALTY PROCEEDINGS AS HAS BEEN NOTICED IN SOME OF THE DECISIONS OF THIS COURT INHERES ON ITA NO.1472/DEL./2011 8 THE FACE OF THE STATUTORY PROVISIONS. PENALTY PROCE EDINGS ARE NOT TO BE INITIATED AS HAS BEEN NOTICED BY THE WAN CHOO COMMITTEE ONLY TO HARASS THE ASSESSEE. THE APPROAC H OF THE ASSESSING OFFICER IN THIS BEHALF MUST BE FAIR AND O BJECTIVE. THE TERM 'INACCURATE PARTICULARS' IS NOT DEFINED. F URNISHING OF AN ASSESSMENT OF VALUE OF THE PROPERTY MAY NOT BY I TSELF BE FURNISHING OF INACCURATE PARTICULARS. EVEN IF THE E XPLANATIONS ARE TAKEN RECOURSE TO A FINDING HAS TO BE ARRIVED AT HAVING REGARD TO CLAUSE (A) OF EXPLANATION 1 THAT THE ASSE SSING OFFICER IS REQUIRED TO ARRIVE AT A FINDING THAT THE EXPLANATION OFFERED BY AN ASSESSEE IN THE EVENT HE OFFERS ONE WAS FALSE. HE MUST BE FOUND TO HAVE FAILED TO PROVE THAT SUCH EXPLANATION IS NOT ONLY NOT BONA FIDE BUT ALL THE FACTS RELATIN G TO THE SAME AND MATERIAL TO THE INCOME WERE NOT DISCLOSED BY HI M. THUS APART FROM HIS EXPLANATION BEING NOT BONA FIDE IT SHOULD HAVE BEEN FOUND AS OF FACT THAT HE HAS NOT DISCLOSED ALL THE FACTS WHICH WAS MATERIAL TO THE COMPUTATION OF HIS INCOME . 5.3 IN THE LIGHT OF AFORESAID OBSERVATIONS O F THE HONBLE APEX COURT WHAT IS TO BE SEEN IN THE INSTANT CASE IS WHETHER THE CLAIM FOR DEDUCTION PRIOR PERIOD EXPENSES COMPRISING EX PENSES ON TRAVEL TELEPHONE WEB DESIGN COMPUTER RUNNING PRINTING & STATIONERY ETC. WAS BONA-FIDE AND WHETHER ALL THE MATERIAL FACTS RE LEVANT THERETO HAVE BEEN FURNISHED AND ONCE IT IS SO ESTABLISHED THE ASSESSEE CANNOT BE HELD LIABLE FOR CONCEALMENT PENALTY U/S 2 71(L)(C) OF THE ACT. AS ALREADY STATED THE LD. CIT(A) FOUND THE E XPLANATION OF THE ASSESSEE BONAFIDE AND FURTHER CONCLUDED THAT ALL TH E FACTS MATERIAL TO COMPUTATION OF INCOME WERE DISCLOSED BY THE ASSE SSEE. THE LD. DR DID NOT PLACE ANY MATERIAL BEFORE US IN ORDER TO CONTROVERT THESE FINDINGS OF THE LD. CIT(A) SO AS TO ENABLE US TO TA KE A DIFFERENT VIEW IN THE MATTER. 5.4 EVEN OTHERWISE A MERE OMISSION OR NEGLIGE NCE WOULD NOT CONSTITUTE A DELIBERATE ACT OF SUPPRESSIO VERI OR SUGGESTIO FA LSI AS HELD IN T. ASHOK PAI VS. CIT 2007 210 CTR (SC) 228. IN THE INSTANT CASE AS CONCLUDED BY THE LD. CIT(A) THE ASSESSEE HAD DISCLOSED ALL THE FACTS AND THE EX PLANATION OF THE ASSESSEE WAS ITA NO.1472/DEL./2011 9 NOT FOUND TO BE FALSE. THEREFORE EVEN THOUGH IT HA D MADE AN ERRONEOUS CLAIM IN THE RETURN WHICH COULD NOT BE JUSTIFIED IN LAW THA T BY ITSELF DID NOT ATTRACT THE PENAL PROVISIONS OF THE ACT. IN CIT V. VIDYAGAURI NATVERL AL [1999] 238 ITR 91 (GUJ) THE HONBLE GUJARAT HIGH COURT MADE A DISTINCTION BETWE EN A WRONG CLAIM AS OPPOSED TO A FALSE CLAIM. IN THAT CASE THE QUESTIO N THAT AROSE WAS OF UNEXPLAINED CASH CREDIT. THE ASSESSING OFFICER NEED ED TO MAKE AN ENQUIRY AS TO WHETHER THE CLAIM OF THE TAXPAYER WAS RIGHT OR NOT. WHAT IS REQUIRED TO BE CONSIDERED WAS WHETHER THERE WAS ANY ENQUIRY THAT W AS REQUIRED TO BE MADE BY THE ASSESSING OFFICER BEFORE CONCLUDING THAT THE TA XPAYER HAD FURNISHED INACCURATE OR FALSE PARTICULARS. NOTHING HAS BEEN B ROUGHT ON RECORD BY THE REVENUE TO SUGGEST THAT THE ASSESSEE'S ACTION WAS NOT BONA FIDE. HON'BLE APEX COURT IN CIT V. RELIANCE PETROPRODUCTS (P.) LTD. [2 010] 322 ITR 158/ 189 TAXMAN 322 AFTER CONSIDERING VARIOUS DECISIONS INCLUDING DILIP N. SHROFF V. JT. CIT [2007] 291 ITR 519/ 161 TAXMAN 218 (SC) AND UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS [2008] 306 ITR 277 / 174 TAXMAN 571 (SC) CONCLUDED THAT A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE IN COME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHIN G INACCURATE PARTICULARS. IN THE CASE UNDER CONSIDERATION THERE IS NOTHING TO S UGGEST THAT THE ASSESSEE FURNISHED ANY INACCURATE PARTICULARS OR C ONCEALED THE PARTICULARS . MOREOVER IT HAS BEEN CONCLUDED LONG BACK BY THEIR LORDSHIPS OF THE HONBLE SUPREME COURT IN HINDUSTAN STEEL LTD. V . STATE OF ORISSA [1972] 83 ITR 26 THAT MERELY BECAUSE TAXING PROVISIONS PROVI DE FOR A POWER TO IMPOSE PENALTY THAT DOES NOT ENTITLE THE AUTHORITIES TO IM POSE A PENALTY FOR EVERY BREACH HOWSOEVER VENIAL OR TECHNICAL IT MAY BE. IN ORDER T O IMPOSE PENALTY THE AUTHORITIES MUST SEE THE CONDUCT AND DELIBERATE INT ENTION ON THE PART OF THE TAXPAYER IN CONCEALING HIS TRUE INCOME. IN OUR VIEW NO SUCH CASE SEEMS TO HAVE BEEN MADE OUT IN THE APPEAL BEFORE US. 6. IN VIEW OF THE FOREGOING WE ARE OF THE OPINIO N THAT MERE ERRONEOUS CLAIM IN THE ABSENCE OF ANY CONCEALMENT O R FURNISHING OF ITA NO.1472/DEL./2011 10 INACCURATE PARTICULARS IS NO GROUND FOR LEVYING PE NALTY ESPECIALLY WHEN THERE IS NOTHING ON RECORD TO SHOW THAT ANY MA TERIAL PARTICULARS WERE CONCEALED OR FURNISHED INACCURATE . IN THESE CIRCUMSTANCES WE ARE OF THE OPINION THAT LEVY O F PENALTY IS NOT JUSTIFIED. CONSEQUENTLY WE HAVE NO HESITATION IN UPHOLDING THE FINDINGS OF THE LD. CIT(A). THEREFORE GROUND NOS.1 & 2 IN THE APPEAL ARE DISMISSED. 7. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE U S IN TERMS OF RESIDUARY GROUND NO.3 IN THE APPEAL ACCORDINGLY T HIS GROUND IS DISMISSED. 8. IN THE RESULT APPEAL IS DISMISSED SD/- SD/- (R.P. TOLANI) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. M/S INTERNATIONAL ACADEMY OF INSURANCE & FINANCI AL MANAGEMENT (P) LTD. 103-A ASHOKA ESTATE BARAKHAM BA ROAD NEW DELHI. 2. INCOME TAX OFFICER WARD-11(4) NEW DELHI 3. CIT CONCERNED. 4. CIT(A)-XXX NEW DELHI 5. DR ITAT C BENCH NEW DELHI 6. GUARD FILE. BY ORDER. DEPUTY / ASSTT.REGISTRAR ITAT DELHI ORDER PRONOUNCED IN OPEN COURT