Facts of the case : An individual appellant, having income under the head “income from salaries”. During a relevant year, the assesse has filed his return on income by claiming exemption of House rent allowance (HRA), which is subsequently disallowed by the Assessing officer on the grounds that the assessee had not filed any evidence in support of the HRA claim u/s 10(13A) and initiated the penalty proceedings u/s 271(1)(c) of the Income Tax Act.
Relevant facts : Penalty under Section 271(1)(c) of the Income Tax Act will be imposed on the assessee if the Assessing Officer opines that the assessee has either concealed the details of income or has furnished incorrect particulars of income. In this case also, Tribunal has analysed the order passed u/s 271(1)(c) and held that penalty was levied for filing inaccurate particulars of income.
As regards to the additions, the assesse has admitted for the addition and therefore it cannot be concluded that the appellant had filed inaccurate particulars of income resulting from an addition to the returned income. Hence, the grounds of levying the penalty have no base to be imposed.
Tribunal also took reference of the case held by the Hon’ble Supreme Court in the case of CIT vs. Reliance Petro Products Ltd, 322 ITR 158, “that the mere disallowance of claim does not entitle levy of penalty”.
Conclusion : On the basis of the relevant facts and the case of CIT vs. Reliance Petro Products Ltd, Chennai Branch, Tribunal (ITAT) directed the Assessing officer to delete the penalty made u/s 271(1)(c) of the Act by concluding “the same cannot be imposed for want of evidence to support the claim for House Rent Allowance (HRA) if the assessee agreed for the addition”.