2010 (1) TMI 42 - HC - Income Tax

Penalty u/s 271(1)(c) AO imposed the penalty on the ground that a false claim had been made in respect of the Duty Entitlement Passbook Scheme (DEPB scheme) under Section 80-IB of the Income Tax Act, 1961 - CIT(A) deleted the penalty - ITAT confirmed the order of CIT(A) held that since the assessee had disclosed all the primary and material facts and, therefore, it could not be said that the assessee had concealed his income or had furnished inappropriate particulars of income. The Tribunal also noted that the assessee had filed explanation regarding its claim for deduction under Section 80-IB of the said Act which, according to the Tribunal, could not be said to be a false claim penalty not to be imposed

Summary

Issues:
Appeal against Tribunal's order deleting penalty under Section 271(1)(c) of the Income Tax Act, 1961 for false claim under DEPB scheme.

Analysis:
The High Court heard an appeal by the Revenue against the Tribunal's decision related to the assessment year 2001-02. The Commissioner of Income Tax (Appeals) had initially deleted a penalty imposed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961, concerning a false claim made under the Duty Entitlement Passbook Scheme (DEPB scheme) under Section 80-IB of the Income Tax Act, 1961. The Tribunal concluded that the assessee had disclosed all relevant facts and did not conceal income or provide incorrect particulars. The Tribunal acknowledged the explanation provided by the assessee regarding the claim for deduction under Section 80-IB, considering it not to be a false claim.

The Tribunal further determined that the DEPB claim issue was debatable when the assessee filed the return, indicating an honest difference of opinion on the deductions made. Consequently, the Tribunal upheld the Commissioner's decision to delete the penalty. The High Court, after reviewing the case, found no grounds to interfere with the Tribunal's decision, emphasizing the debatable nature of the DEPB claim at the relevant time. The Court concluded that no substantial question of law arose for consideration and dismissed the appeal.

In summary, the High Court upheld the Tribunal's decision, emphasizing the honest difference of opinion regarding the DEPB claim and finding no legal basis to interfere with the Commissioner's order. The Court's ruling resulted in the dismissal of the appeal by the Revenue.