2010 (12) TMI 892 - HC - Income Tax

Penalty under Section 271 (1)(c) - deduction claimed under Section 80IB on export incentives - disallowance of deduction by holding that there was no deliberate furnishing of inaccurate particulars by the assessee, - Revenue does not dispute that the matter is covered against the revenue by order of this Court in CIT v. M/s Raj Overseas (2010 -TMI - 204320 - PUNJAB AND HARYANA HIGH COURT). appeals are dismissed.

Summary

Issues:
Appeal against deletion of penalty under Section 271(1)(c) on deduction claimed under Section 80IB on export incentives.

Analysis:
The judgment pertains to the appeal filed by the revenue under Section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal. The primary issue raised in this case was whether the Tribunal was correct in deleting the penalty imposed under Section 271(1)(c) on the amount of deduction claimed under Section 80IB on export incentives. The Tribunal had held that there was no deliberate furnishing of inaccurate particulars by the assessee. The revenue contended that the decision of the Supreme Court disallowing claim of deduction on export incentives was available to the assessee at the time of filing the return of income, and thus, the assessee was filing inaccurate particulars of income in claiming the deduction under Section 80IB.

The second issue raised was whether the Tribunal's decision to delete the penalty under Section 271(1)(c) was justified in light of another decision of the Supreme Court reaffirming the non-allowability of 80IB deduction on export incentives. The revenue argued that the Tribunal's decision was not in line with the Supreme Court's ruling.

The third issue focused on whether the Tribunal's decision to quash the penalty order under Section 271(1)(c) on the ground of no deliberate concealment was justified. The revenue cited a Supreme Court decision stating that mens rea is not essential for the levy of penalty under this section and that the penalty is mandatory as a remedy for revenue loss. The revenue contended that revenue loss had occurred due to the wrong claim made by the assessee regarding the deduction under Section 80IB.

The counsel for the revenue acknowledged that a prior order of the Court had ruled against the revenue in a similar matter. Consequently, the Court dismissed the appeals, upholding the Tribunal's decision to delete the penalty under Section 271(1)(c) on the deduction claimed under Section 80IB on export incentives.