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TMI Blog2010 (2) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... the withdrawal of such claim was also based on sound legal opinion - action can also be considered to be a bona fide action so as to exonerate the assessee from the clutches of penalty under section 271(1)(c) of the Act - particulars were correctly filed - penalty levied under section 271(1)(c) of the Act set aside X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to penalty under section 271(1)(c) of the Act for furnishing inaccurate particulars of income. 4. Before the learned Commissioner of Income-tax (Appeals) it was contended that the assessee is entitled to put up any claim at any time before completion of assessment proceedings. Provision for NPA was made as per Non-Banking Financial Companies (Prudential Norms) Guidelines, 1998, issued by the Reserve Bank of India. However, on subsequent legal advice the claim was withdrawn. Therefore, it is a voluntary withdrawal of claim and hence not liable for penalty. The assessee also relied upon the following judgments : (i) CIT v. Chohal Investments Ltd. (ii) CIT v. Jai Bharat Maruti Ltd. (iii) CIT v. Bharat Hotels Ltd. [2009] 309 ITR 134 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence instead of litigating the claim was withdrawn. However, at the time when the return was filed there was difference of judicial opinion as to allowability of the provision for NPA on the basis of RBI Guidelines. The dispute was resolved only after the decision of the Special Bench of the Tribunal was rendered in the case of New India Industries Ltd. v. Asstt. CIT [2007] 112 TTJ (Delhi) 917. This decision was rendered on 26-10-2007. Prior to trus-there was a difference of opinion in the Tribunal's order. The Chennai Bench of the Tribunal in the case of Overseas Sanmar Financial Ltd. v. Joint CIT [2003] 86 ITD 602 held that the provision for NPA made in consonance with prudential norms of RBI has to be allowed for deduction in computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer had already formed conclusive opinion so as to hold that the claim is not allowable. When the provision was made, the same was based on the prudential norms issued by RBI, which the assessee is mandatorily required to follow. The claim is also found in accordance with the view adopted by the Tribunal ip the cases eked by the learned authorised representative. Therefore, if can be said that when the claim was made, the same was bona fide claim supported by judicial opinion of the Tribunal. The decision of the Special Bench was rendered much after the assessment was completed. Since the assessee wanted to avoid litigation, the claim was withdrawn without admitting that the same was a bogus claim. We, therefore, held that the claim was a b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndatory prudential norms issued by the RBI, based on judicial pronouncements cited in both the orders of the Assessing Officer and the Commissioner of Income-tax (Appeals). Once a claim is made based on certain judicial pronouncements, it cannot be said that the assessee has concealed particulars of income nor furnished inaccurate particulars of income. In the case of claim of depreciation, the assessee has suo motu withdrawn the additional claim of 5 per cent., consequent to the decision of the jurisdictional High Court in the case of Deputy CIT v. Ford Credit Kotak Mahindra Ltd. in IT Appeal No. 1219/Mum./2007. Similarly in view of the retrospective amendment to section 36(1)(vii) the assessee reversed its claim of provision for doubtful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for tax purposes, penalty cannot be levied. 7.3 Similarly, in the case of CIT v. Span Holdings Ltd. [2007] 294 ITR 83 (Delhi), the assessee's claim for depreciation on the basis of sale and lease back of a bio-gas plant, its genuineness could not be questioned merely because the assessee was not able to produce the managing director of the lessee company, penalty was found to be not leviable." 9. On the basis of facts of the present case and the order of the Tribunal extracted hereinabove, it is not a fit case for confirming levy of penalty under section 271(1)(c) of the Act for furnishing inaccurate particulars of the income. We are, therefore, unable to confirm the penalty levied under section 271(1)(c) of the Act. 10. In the result, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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