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2021 (9) TMI 1255 - AT - Income TaxPenalty u/s. 271(1)(c) - disallowance of deduction u/s. 35(2AB) as the assessee not voluntarily disclosed the fact of not receiving DSIR Certificate for - revised computation was filed by the assessee only after AO questioned him on deduction u/s. 35(2AB) during the assessment proceedings - CIT-A Deleted the penalty levy - HELD THAT - CIT(A) has give a categorical finding that the assessee was under the genuine belief that approval will be granted by the appropriate authority i.e. DSIR and accordingly made the claim for deduction u/s. 35(2AB) of the Act for the Assessment Year under consideration. But the approval was granted by DSIR w.e.f. 01.04.2013 and, therefore, the assessee withdrawn the weighted deduction claim by filing revised computation of income before the Assessing Officer in ongoing assessment proceedings. This cannot be termed as concealing income or furnishing inaccurate particulars of income. Besides this, the assessee has also given explanation before the Assessing Officer as relates to revised computation of income. Thus, in case of CIT Vs. Reliance Petro Products Pvt. Ltd. 2010 (3) TMI 80 - SUPREME COURT - Thus, there is no need to interfere with the findings of the CIT(A). The appeal of the Revenue is dismissed.
Issues:
1. Whether the penalty under section 271(1)(c) for deduction u/s. 35(2AB) was rightly deleted by the CIT(A)? Analysis: The appeal was filed by the Revenue against the order of CIT(A) for the assessment year 2013-14 concerning the penalty of ?58,97,366 levied under section 271(1)(c) for deduction u/s. 35(2AB). The assessee, engaged in biotechnology business, filed its return of income declaring a loss and book profits. The assessment was completed by the Assessing Officer, making various additions and disallowances. Penalty proceedings were initiated under section 271(1)(c) for furnishing inaccurate particulars of income. The Assessing Officer levied a penalty of ?58,97,366, which was challenged by the assessee before the CIT(A). The CIT(A) allowed the appeal of the assessee, holding that the assessee genuinely believed that approval would be granted by DSIR for deduction u/s. 35(2AB). The approval was granted after the claim was made, and the assessee withdrew the claim by filing a revised computation of income during the assessment proceedings. The CIT(A) found that this action did not amount to concealing income or furnishing inaccurate particulars of income. The assessee provided explanations to the Assessing Officer regarding the revised computation of income. The CIT(A) relied on the decision of the Hon'ble Apex Court in the case of CIT Vs. Reliance Petro Products Pvt. Ltd. (2010) 322 ITR 158 Delhi to support its findings. Consequently, the CIT(A) dismissed the appeal of the Revenue. In conclusion, the Tribunal upheld the decision of the CIT(A) and dismissed the appeal of the Revenue. The Tribunal concurred with the CIT(A)'s findings that the assessee's actions did not constitute concealment of income or furnishing inaccurate particulars of income. The Tribunal's decision was based on the genuine belief of the assessee regarding the approval for the deduction u/s. 35(2AB) and the subsequent withdrawal of the claim upon receiving the approval from DSIR. The Tribunal found no grounds to interfere with the CIT(A)'s decision, thereby affirming the deletion of the penalty imposed under section 271(1)(c) by the Assessing Officer.
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