2014 (5) TMI 49 - AT - Income Tax

Cancellation of penalty u/s 271(1)(c) of the Act Concealment of particulars - Deduction u/s 80IB of the Act - Held that - The assessee is an export house registered under the Govt. of India Export Manufacturing and Exporting Leather Garments Scheme u/s 80IB - The income was received under the duty drawback, DEPB, and interest on FDRs - The assessee claimed deduction, since the receipts were part of the receipts relating to the assessee s industrial undertaking. Full deduction was disallowed, but such disallowance of claim cannot be said to be, by any stretch of imagination, concealment of particulars of income or furnishing of inaccurate particulars of income by the assessee - the appellant had disclosed all the primary and material facts and it could not be said that the appellant had concealed his income or had furnished inaccurate particulars of income - the appellant had filed explanation regarding its claim for deduction under section 80-IB of the Act thus, there is no infirmity in the order of the CIT(A) Decided against Revenue.

Summary

Issues:
- Appeal against order of CIT(A)-XIII, New Delhi dated 17th August, 2012 for the AY 2003-04.
- Ex parte decision due to absence of the assessee during the hearing.
- Disallowance of deduction u/s 80-IB on interest and incentives, duty draw back received, and DEPB.
- Contention regarding interest income not pertaining to the appellant.
- Claim of deduction u/s 80-IB on interest income and penalty levied by the Assessing Officer.
- Arguments on conflicting judgments of various High Courts and Tribunals regarding the deduction.
- Justification for penalty under section 271(1)(c) of the Income Tax Act.
- Comparison with similar cases and judgments where penalties were cancelled.
- Upholding the order of CIT(A) and dismissal of the Revenue's appeal.

Analysis:
The appeal was filed against the order of the CIT(A)-XIII, New Delhi for the AY 2003-04. During the hearing, the assessee was absent, leading to an ex parte decision by the tribunal. The dispute revolved around the disallowance of deduction u/s 80-IB on various items, including interest income, incentives, duty draw back, and DEPB. The appellant contended that the interest income in question did not pertain to them, supported by a certificate from a bank. The appellant also argued for the deduction u/s 80-IB on interest income, citing conflicting judgments from High Courts and Tribunals on the issue. The appellant emphasized that there was no deliberate attempt to conceal income and disclosed all material facts related to the deduction.

The tribunal considered the arguments, noting that similar penalties were cancelled in the appellant's own case for AY 2001-02 and in other cases cited. The tribunal upheld the order of the CIT(A), emphasizing the consistency in decisions across cases and the lack of justification to interfere. The tribunal found no infirmity in the CIT(A)'s order and dismissed the Revenue's appeal. The decision was pronounced on 7th March 2014, affirming the cancellation of the penalty under section 271(1)(c) of the Income Tax Act.