2019 (9) TMI 545 - AT - Income Tax

Penalty u/s. 271(1)(c) - disallowance of deduction u/s. 80IA on profit from DEPB and computation of book profit u/s. 115JB - debatable issues - HELD THAT - Assessee had disclosed all relevant particulars for computation of its income. All the relevant facts were already before AO. The issues on which additions were made were debatable and the instant case of the assessee was a case of bonafide difference of opinion on the entitlement of deduction as per provision of the Act. The assessee had also disclosed the compete facts of merger and its claim of deduction u/s. 115JB of the Act. We uphold the findings of the ld. CIT(A) that the assessing officer has not established that the assessee furnished incorrect facts after placing reliance on the decision of CIT vs. Reliance Petro products Pvt. Ltd. 2010 (3) TMI 80 - SUPREME COURT .- Appeal of the Revenue is dismissed.

Summary

Issues:
- Appeal against deletion of penalty under section 271(1)(c) on disallowance of deduction under section 80IA and computation of book profit under section 115JB.

Analysis:
1. The revenue's appeal was against the decision of the CIT(A) to delete the penalty levied under section 271(1)(c) on disallowance of deduction under section 80IA on profit from DEPB and computation of book profit under section 115JB of the Income Tax Act, 1961.

2. The assessing officer initiated penalty proceedings under section 271(1)(c) regarding the addition made in the assessment order, which was upheld by the ITAT Ahmedabad. The issues included the disallowance of deduction under section 80IA and the deduction of book losses of a merged company for computing book profit under section 115JB.

3. The CIT(A) allowed the appeal of the assessee, stating that the penalty notice was validly issued by the assessing officer, as recorded in the assessment order. The CIT(A) referenced legal judgments to support the decision that penalty cannot be imposed on debatable issues, such as the eligibility to claim deduction under section 80IA.

4. The CIT(A) further held that no penalty was imposable on the disallowance of deduction under section 80IA and the deduction of losses from book profit under section 115JB. It was emphasized that the appellant had disclosed all details, and the assessing officer failed to establish that incorrect facts were furnished.

5. During the appellate proceedings, the counsel presented relevant documents and legal precedents supporting the contention that there was no inaccurate furnishing of particulars of income. The Tribunal upheld the CIT(A)'s decision, stating that the issues were debatable, and the assessee had disclosed all relevant facts for income computation.

6. The Tribunal concluded that the assessing officer did not prove that the assessee furnished incorrect facts, considering it a case of genuine difference of opinion. Relying on the decision of the Supreme Court, the Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s findings.

Judgment Summary:
The Appellate Tribunal upheld the CIT(A)'s decision to delete the penalty imposed under section 271(1)(c) on the disallowance of deduction under section 80IA and computation of book profit under section 115JB. The Tribunal found that the issues were debatable, and the assessee had disclosed all relevant particulars, leading to a genuine difference of opinion. Consequently, the revenue's appeal was dismissed, affirming the CIT(A)'s findings.