2018 (12) TMI 703 - HC - Income Tax

Penalty levied u/s 271(1)(c) - disallowance of claim u/s 80IB(9) - Held that - Revenue had raised the question of the quantum additions being deleted in connection with the assessee s claim of deduction under Section 80IB(9). This would mean that the decision of the Tribunal with respect to the quantum additions has become final. If that be so, obviously the penalty in relation to such additions cannot be sustained. Revenue stated that the order of the High Court dated 16th March, 2017 refers only to the additions under Section 80(9). There were other additions in the same assessment year 2007-08. If that be so, the rest of the issues do not even appear to have been challenged by the Revenue in the said appeal. Even on that ground no further penalty can be sustained. We also notice that the Revenue is contesting the deletion of penalty on account of interest income, foreign exchange gain and other miscellaneous income. Tribunal has in the impugned judgment given detailed reasons and come to the conclusion that there was complete disclosure on part of the assessee and therefore, no penalty could have been leveled. Tribunal in the process referred to and relied upon the judgment of Supreme Court in case of CIT Vs. Reliance Petroproducts Pvt. Ltd. 2010 (3) TMI 80 - SUPREME COURT - No question of law.

Summary

Issues:
1. Appeal against the judgment of Income Tax Appellate Tribunal
2. Deletion of penalty under Section 271(1)(c) on disallowance of claims under various sections
3. Justification of upholding the order of CIT(A) in deleting penalties
4. Challenge of quantum additions before the High Court by the Revenue

Analysis:
The appeal was filed against the Income Tax Appellate Tribunal's judgment, questioning the deletion of penalties under Section 271(1)(c) related to disallowed claims. The main contention of the Revenue was that the quantum additions, which were deleted by the Tribunal, had been challenged before the High Court. However, it was revealed that the Revenue had withdrawn the appeal related to the quantum additions concerning the assessee's claim of deduction under Section 80IB(9) of the Income Tax Act. As a result, the decision of the Tribunal on these quantum additions became final, leading to the conclusion that the penalties could not be sustained. The Revenue contested the deletion of penalties on other income components as well, but it was noted that no further penalties could be upheld if those issues were not challenged in the appeal before the High Court.

The Tribunal, in its judgment, provided detailed reasons for concluding that there was complete disclosure by the assessee, justifying the deletion of penalties. The Tribunal also referred to and relied upon the Supreme Court judgment in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd. 322 ITR 158(SC) to support its decision. Consequently, it was determined that no question of law arose in this context, leading to the dismissal of the tax appeal.