Section 271 of Income Tax Act, 1961—Levy of penalty u/s 271(1)(c)—In the instant case, AO disallowed the claim of HRA claimed by assessee on the ground that assessee was also part owner of the property on which he has paid rent. AO was convinced that the assessee has deliberately furnished inaccurate particulars of his income and intended to evade taxes within the meaning of section 271(1)(c) of the Act and levied penalty of 80,000/-.

Held that—It cannot be said that the assessee paid rent with malafide intention to reduce his tax liability. The rent was actually paid to the co-owners and this fact has also not been disputed by the Assessing Officer. Merely because the claim of the assessee did not find any favour with the Assessing Officer would not, ipso facto, become a bogus claim.[SHRI VINOD AHUJA TOWER - 1 VERSUS THE A.C.I.T. CIRCLE -70 (1) NEW DELHI] [2019] 12 ITCD Online (35) [ITAT DELHI]