2010 (1) TMI 1201 - AT - Income Tax

Summary

Issues involved: Appeal by Revenue against deletion of penalty u/s 271(1)(c) for wrong claim of deduction u/s 80IB of Income-tax Act, 1961 for Assessment Years 2002-03, 2003-04, and 2004-05.

Summary:
1. The appeals arose from orders of CIT(A) Karnal regarding penalty imposed u/s 271(1)(c) for wrong deduction claim u/s 80IB on export incentives.
2. The Assessing Officer disallowed the deduction u/s 80IB based on a Supreme Court decision and initiated penalty proceedings.
3. Assessee argued penalty could not be imposed due to differing High Court decisions on deduction u/s 80IB for export incentives.
4. CIT(A) deleted the penalty citing support for the deduction claim from various High Court and ITAT decisions.
5. ITAT Delhi Bench "C" also deleted the penalty, considering the claim as bona fide and debatable due to conflicting High Court opinions.
6. The penalty was not upheld, and the Revenue's appeals for all years were dismissed.

Judgment Details:
- The appeals concerned the penalty imposed u/s 271(1)(c) for incorrect deduction claims u/s 80IB on export incentives for Assessment Years 2002-03, 2003-04, and 2004-05.
- The Assessing Officer disallowed the deduction based on a Supreme Court decision and initiated penalty proceedings.
- Assessee argued against penalty imposition citing differing High Court decisions on the deduction's allowability.
- CIT(A) deleted the penalty, noting the bona fide nature of the claim and support from various High Court and ITAT decisions.
- ITAT Delhi Bench "C" also upheld the deletion of penalty, considering the claim as debatable due to conflicting High Court opinions.
- The penalty u/s 271(1)(c) was not imposed, and the Revenue's appeals for all years were dismissed.