Penalty Rightly Imposed for Furnishing Inaccurate Particulars if Assessee Withdrew Incorrect Claim by Filing Revised ITR

Case Details: Smt. Maya K. Dharwani vs. Income-tax Officer - [2024] 166 taxmann.com 558 (Ahmedabad-Trib.)

Judiciary and Counsel Details

• Ms Suchitra Kamble, Judicial Member & Makarand V. Mahadeokar, Accountant Member
• S.N. Divatia, AR for the Appellant.
• V.K. Mangla, Sr. DR for the Respondent.

Facts of the Case

The assessee was an individual having interest on loans and income from house property as main source of income. The assessee filed her return of income for the relevant assessment year. Afterwards, the assessee’s case was selected for scrutiny, and the assessment was completed after disallowing deductions claimed under sections 54EC and 54F of the Act.

The Assessing Officer (AO) concluded that the assessee had made an attempt to show less long-term capital gains by making claim under section 54EC without making any investment and this attempt was only to avoid tax liability. Accordingly, the AO initiated penalty proceedings under section 271(1)(c) of the Act for furnishing inaccurate particulars.

On appeal, CIT(A) confirmed the penalty order. Aggrieved by the order, the assessee filed an appeal to the Ahmedabad Tribunal.

ITAT Held

The Tribunal held that as far as the deduction claimed under section 54EC was concerned, the assessee herself admitted that the claim was incorrect and, by filing a revised statement of income, withdrew the claim under section 54EC, which was an act of furnishing inaccurate particulars. Therefore, the Assessing Officer rightly imposed the penalty for intentionally furnishing inaccurate particulars of income within the meaning of section 271(1)(c) relating to the quantum of incorrect deduction under section 54EC.