Penalty under s 271(1)(c)

Merely because the assessee made claim of deduction under a wrong head, would not mean that the claim was false for imposition of penalty under s 271(1)(c) — as held by DelHC in CIT v Sumangal Overseas Ltd — In favour of: The assessee.

During the penalty proceedings, it is open to the Tribunal to look into the transaction to see as to whether the claim was bona fide or it was bogus and result of falsehood even where no appeal is preferred by the assessee against the quantum order.

Decided on: 18 November 2011.

When two views were possible and the assessee made the claim on the basis of advice of the consultants, no penalty should be imposed under s 271(1)(c) — as held by DelHC in CIT v KAS Movie Pvt Ltd — In favour of: The assessee.

The assessee’s claim was rejected purely on legal grounds. The return was prepared as per the guidance/supervision of the tax consultant; there was no basis to hold that the claim was dishonestly made in collusion with the auditors, and no penalty should be imposed under s 271(1)(c).

Deduction under s 80HHF — Ownership of goods is not essential for the purpose of claiming benefit under s 80HHF.

Decided on: 18 November 2011.