Sec. 271(1)(c) of Income Tax Act, 1961 – Penalty – A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee.

Facts: AO levied penalty under Section 271(1)(c) on the premise that the assessee had furnished inaccurate particulars of income.The CIT(A) allowed the appeal preferred by the assessee. Revenue being dissatisfied with the decision of the CIT(A) preferred appeal before Tribunal. Tribunal concurred with the findings recorded by CIT(A) and dismissed the appeal preferred by the Revenue.

Held, that it is trite that every disallowance of claim cannot lead to as an automatic consequence in the form of penalty. Making an incorrect claim by any stretch of imagination would not tantamount to furnishing inaccurate particulars. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing the inaccurate particulars. Thus, the order of Tribunal was confirmed – PR. CIT Vs. CLP POWER INDIA PVT. LTD. [2020] 424 ITR 098 (GUJ)