The Principal Commissioner Of Income ... vs M/S Reliance Petro Marketing Limited on 2 November, 2018
Court we hold that when the issue is admitted by Hon'ble High Court as
substantial question of law in the case of the assessee on disallowance of Rs.
261406249/- for power purchase price difference, no penalty u/s 271(1)(c) can
be levied. Furthermore, in past years the Tribunal has decided this issue in
favour of the assessee that itself makes the issue debatable. Further, in AY 2003-
04 on identical issue the Assessing Officer has dropped the penalty proceedings
u/s 271(1)(c) in view of the facts of the case, nature of addition and in view of the
reply of the assessee. The copy of such order dated 12.03.2008 was placed on the
record and same was not contraverted by revenue. We are of the view that
consistent approach should have been taken by revenue in this case for this year
too. Hon'ble Supreme Court in case of CIT Vs. Reliance Petro Products Ltd 322
ITR 158 has stated that a mere making of the claim which is not sustainable in
law by itself does not amount to furnishing of inaccurate particulars regarding
the income of the assessee and does not invite penalty u/s 271(1)(c) of the Act. In
the present case also the assessee has disclosed full facts about the claim made in
the computation of total income filed. Further, detailed explanation about the
power purchase price was given in notes to accounts in Schedule 16 of its annual
account. Therefore, it cannot be said that the assessee has furnished inaccurate
particulars of its claim. It also cannot be said that the claim of the assessee is not
a bona fied claim because of the past history of such claim being allowed to the
assessee by the tribunal. In view of the above facts we do not find any infirmity in
the order of the ld CIT(A) in deleting the penalty of Rs. 8.80 crores u/s 271(1)(c)
of the Act."