2015 (3) TMI 45 - AT - Income Tax

Penalty u/s 271(1)(c ) - addition in respect of downward impact of retention of price subsidy and 80IA in respect of Captive Power Plant - Held that - As the quantum additions have been deleted by this Bench of ITAT for the assessment year 2003-04. Since quantum additions were deleted, we see no reason to interfere in the order of the ld. CIT(A). - Decided against revenue. Addition on account of wrong deduction u/s 80IA - Held that - In view of the vexed legal history, the AO rejected assessee's explanation and made addition which was not challenged by the assessee in appeal for any reason. In these facts and circumstances of the case, the assessee's non-appealing of the issue does not tantamount to admission of addition in terms of Mak Data (P) Ltd. vs. CIT (2013 (11) TMI 14 - SUPREME COURT) judgment. Since all the material particulars were filed by the assessee along with return of income and they were part of the return. The ratio of Reliance Petro Products (P) Ltd. (2010 (3) TMI 80 - SUPREME COURT ) is squarely applicable to assessee's case relied for deletion of penalties in respect of IMACID and Captive Power Plant. Ground of the Revenue in respect of miscellaneous income u/s 80IA claim is dismissed. - Decided in favour of assessee

Summary

Issues:
- Cross appeals against the order of the ld. CIT(A) for penalty proceedings u/s 271(1)(c) for the assessment year 2003-04.
- Assessee's appeal challenging penalty imposition u/s 271(1)(c).
- Revenue's appeal contesting deletion of penalties on various grounds.

Assessee's Appeal:
The assessee contended that the penalty imposed was due to a bonafide mistake in disclosing net receipts without including TDS for a Joint Venture Company. Referring to a previous ITAT order, the penalty was deleted based on the Hon'ble Supreme Court's decision in the case of CIT vs. Reliance Petroproducts (P) Ltd. The penalty was subsequently deleted by ITAT following the same reasoning.

Revenue's Appeal - Ground 1:
The Revenue challenged the deletion of penalty on the downward impact of retention price subsidy. The assessee argued that the quantum addition had been previously deleted by ITAT for the same assessment year, which was upheld by the ld. CIT(A). Consequently, the penalty was dismissed.

Revenue's Appeal - Ground 2:
Regarding penalty on the wrong deduction u/s 80IA for a Captive Power Plant, the quantum addition was previously deleted by ITAT in the assessee's case. Therefore, the penalty imposed by the Revenue was also deleted.

Revenue's Appeal - Ground 3:
The Revenue's appeal on the deduction of miscellaneous income u/s 80IA was also dismissed. The ld. CIT(A) had deleted the penalty citing the Hon'ble Supreme Court's decision in Reliance Petroproducts (P) Ltd. case. The assessee's non-appeal on the issue did not amount to admission of the addition, as the facts were disputed and part of a prolonged legal debate.

In conclusion, the ITAT allowed the assessee's appeal and dismissed the Revenue's appeal. The penalties were deleted based on previous ITAT orders and the application of relevant legal judgments.