2021 (4) TMI 156 - AT - Income Tax

Penalty u/s 271(1)(c) - denial of deduction under section 80IB(10) - HELD THAT - Assessee had derived profit from the project named Shreeji Heights. We notice that the learned Commissioner (Appeals) observed that the assessee did not make the said claim in the return of income since the assessee was under mistaken understanding of the law that since it has constructed commercial units, it cannot claim benefit under section 80IB(10). Commissioner (Appeals) noticed that the assessee s housing project was approved on 16th April 2004, therefore, the project was eligible for claiming deduction under section 80IB of the Act which fact is in conformity with the judgment of the Hon'ble Jurisdictional High Court in CIT v/s Brahma Associates 2011 (2) TMI 373 - BOMBAY HIGH COURT wherein it has been held that the claim is fully allowable in case the project was approved prior to the amendment made in law w.e.f. 1st April 2005. In view of these observations, the learned Commissioner (Appeals) held that the assessee was eligible for claiming deduction under section 80IB Co ordinate Bench has allowed the claim of assessee under section 80IB of the Act for the assessment year 2010 11 and 2012 13 even though these claims were also made first time before the Assessing Officer. The claim of the assessee for the assessment year 2009 10 was rejected. Just because the claim for this A.Y. 2009 10 was rejected, the penalty cannot be imposed considering the fact that the assessee has submitted all the relevant information during the assessment proceedings and also all the relevant information relating to this claim was available on record. There is no concealment or furnishing of inaccurate particulars in this case. Consequently, we are in agreement with the observations of the learned Commissioner (Appeals) who was indeed justified in directing to delete the penalty imposed by the Assessing Officer under section 271(1)(c) - Decided in favour of assessee.

Summary

Issues:
Challenge to deletion of penalty under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2009-10.

Analysis:
1. Facts and Background: The Revenue filed an appeal against the deletion of penalty of ?2,09,76,344 imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2009-10. The penalty was imposed due to disallowance of deduction claimed under section 80IB(10) of the Act.

2. Initial Assessment and Penalty Proceedings: A search and seizure action was conducted in the assessee's case, resulting in the Assessing Officer disallowing the deduction under section 80IB(10) and initiating penalty proceedings under section 271(1)(c). The penalty was imposed after the quantum addition was confirmed by the Commissioner (Appeals).

3. Commissioner (Appeals) Decision: The Commissioner (Appeals) examined the issue in light of previous Tribunal decisions and judicial pronouncements. Relying on case law, the Commissioner held that the assessee's claim for deduction was bona fide and not a ground for penalty under section 271(1)(c). The Commissioner directed the Assessing Officer to delete the penalty.

4. Tribunal's Decision: The Tribunal upheld the Commissioner's decision to delete the penalty. It noted that the assessee's claim for deduction under section 80IB(10) was valid, and there was no concealment or furnishing of inaccurate particulars. The Tribunal distinguished the case from precedents cited by the Revenue, finding no basis for upholding the penalty.

5. Conclusion: The Tribunal dismissed the Revenue's appeal, affirming the deletion of the penalty under section 271(1)(c) for the assessment year 2009-10. The Tribunal found no infirmity in the Commissioner's order and upheld it based on the facts and circumstances of the case.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive overview of the decision-making process and the reasoning behind the deletion of the penalty under section 271(1)(c) of the Income Tax Act, 1961.