2017 (12) TMI 53 - AT - Income Tax

Penalty u/s 271(1)(c) - Claim under 80IB - Held that - Assessee followed the ratio laid down by Hon ble Delhi High Court in the case of CIT vs. Elteck SGS Pvt. Ltd.(2008 (2) TMI 17 - DELHI HIGH COURT). Even for the previous year 2007-08 assessee s claim under 80IB was allowed by this Tribunal against which appeal of revenue before Hon ble Delhi High Court was dismissed. These facts has not been disputed by the authorities below in any manner whatsoever. Under these circumstances we are of the considered opinion that mere making of claims which is not sustainable in law subsequently will not amount to furnishing of inaccurate particulars regarding the income of assessee as observed by Hon ble Supreme Court in the case of CIT vs. Reliance Petro Products Pvt.Ltd 2010 (3) TMI 80 - SUPREME COURT . - Appeal filed by the assessee stands allowed.

Summary

Issues Involved:
Penalty appeal against order passed by Ld. CIT (A)-18, New Delhi for AY 2008-09.

Analysis:

Issue 1:
Assessee challenged the penalty under section 271(1)(c) imposed by Ld. CIT (A) for AY 2008-09.

Analysis:
The appellant contended that the penalty was unjustified as the claim for deduction under section 80 IB was based on the law prevailing at the time of filing the return. The appellant relied on the decision of the Delhi High Court in CIT vs Elteck SGC (P) Ltd. The appellant argued that the penalty should be quashed as there was no concealment or filing of inaccurate particulars.

Issue 2:
Assessee's claim for deduction under section 80 IB disallowed by the assessing officer.

Analysis:
The assessing officer disallowed the deduction claimed by the assessee under section 80 IB on the grounds that the duty drawback from Customs did not form part of the total income derived from industrial activities. The authorities below confirmed the disallowance during the quantum proceedings. However, the assessee had followed the decision of the Delhi High Court in CIT vs. Elteck SGC Pvt. Ltd. while filing the return, and the claim was allowed for the previous year 2007-08.

Issue 3:
Assessee's contention that there was no concealment or filing of inaccurate particulars.

Analysis:
The appellant argued that the claim for deduction was made in good faith based on the prevailing law and previous decisions in favor of the assessee. The appellant emphasized that there was no concealment or inaccuracies in the return filed, as all relevant details were disclosed. The Tribunal agreed that making a claim that is later found unsustainable in law does not amount to furnishing inaccurate particulars, citing the decision of the Supreme Court in CIT vs. Reliance Petro Products Pvt. Ltd.

Conclusion:
The Tribunal allowed the appeal, deleting the penalty levied by the assessing officer. The Tribunal found that the assessee had made the claim based on existing law and previous favorable decisions, and there was no intention to conceal income or provide inaccurate particulars. The Tribunal emphasized that making a claim that is later disallowed does not automatically warrant a penalty under section 271(1)(c).