- (1.) Heard Sri Dhananjay Awasthi, learned counsel for the appellant and Sri R.P. Agrawal, learned counsel appearing for the respondent. There are following five substantial questions of law, formulated by this court while admitting this appeal, vide order dated May 21, 2009: "Q. 1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is justified in holding that the Assessing Officer has not recorded any positive and categorical satisfaction about concealment in the assessment order under section 271(1)(c) of the Income-tax Act and cancelling the penalty on this ground alone when in the assessment order the satisfaction for initiating penalty is clearly mentioned? Q. 2. Whether, on the facts and in the circumstances of the case, the ratio laid down by the hon'ble apex court in the case of CIT v. Prithipal Singh and Co., 2001 249 ITR 670 (SC) applies to the case under consideration? Q. 3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal has erred in law in ignoring that Explanation 4 to section 271 of the Income-tax Act brought on the statute with effect from April 1, 1976, is clarificatory in nature as the Explanation so brought to the main provisions is merely a mandate to explain or clarify certain ambiguities which have crept in, in the statutory provisions (reliance on CIT v. Mohan Meakin Breweries Ltd., 1991 192 ITR 134 (HP) and Laxmi Industries Ltd. v. ITO, 1998 231 ITR 514 (Raj.))? Q. 4. Whether the Income-tax Appellate Tribunal is justified in ignoring the fact of the case that the assessee has not declared the pre-operative income amounting to Rs. 26,63,283 by capitalizing the same with pre-operative expenses thereby furnishing inaccurate particulars? Q. 5. Whether the Income-tax Appellate Tribunal is legally justified in holding that penalty under section 271(1)(c) of the Income-tax Act is not imposable when the assessed figure is less?"
(2.) In our view, there have arisen two more substantial questions of law: Q. 6. Whether a wrong deduction of an amount duly disclosed in the assessment year can be treated as furnishing of inaccurate particulars of income so as to attract the provisions of section 271(1)(c)? Q. 7. Whether despite recording of concurrent finding that there is no concealment of income, by the Commissioner of Income-tax (Appeals) and the Tribunal, still imposition of penalty can be justified?
(3.) In the present case, it is not in dispute that details of Rs. 26,63,283 were disclosed by assessee in his account books, as under:;