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TMI Blog2015 (4) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... e authority, who has rightly cancelled the levy of the penalty. - Decided in favour of the assessee - Income Tax Appeal No. - 65 of 2015 - - - Dated:- 16-4-2015 - Hon'ble Arun Tandon And Hon'ble Dr. Satish Chandra,JJ. For the Appellant : S.K. Garg,Ashish Bansal For the Respondent : C.S.C. It ORDER The present appeal is filed by the assessee against the impugned order dated 28th November 2014 passed by the Income Tax Appellate Tribunal, Lucknow in ITA No. 125/LKW/2012 for the assessment year 2006-07. On 25.03.2015 the appeal was admitted by this Court on the following substantial question of law : Whether in the facts and circumstances of the case, levy of penalty under Section 271(1)(c) is justified or not? The brief facts of the case are that the appellant-assessee is a Private Limited Company. During the assessment year 2002-03, the assessee was engaged in the construction of Multiplex Theater, but the same could not become commercially operational and functional even after the trial runs . So on 07.11.2002, the assessee has filed the return showing nil income where no depreciation was claimed on capital expenditure. But the A.O. suo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim of the deduction does not amount the concealment of income. Moreover, no satisfaction was recorded by the A.O. before initiating penalty proceedings. The requirement to record the satisfaction is absolute even after the amendments made in the law relating to the levy of penalty under section 271(1)(c). It is also a submission of the learned counsel for the assessee that the same claim was made by the appellant in the assessment year 2004-05, which was disallowed and penalty proceedings were also started in the said assessment year, but later, it was dropped vide order dated 31.3.2010. He read out the section 80-IB(7A), which on reproduction reads as under : (7A) The amount of deduction in the case of any multiplex theatre shall be- (a) fifty per cent of the profits and gains derived, from the business of building, owning and operating a multiplex theatre, for a period of five consecutive years beginning from the initial assessment year in any place : Provided that nothing contained in this clause shall apply to a multiplex theatre located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) CIT vs. Harshvardhan Chemicals and Mineral Ltd. (2003) 259 ITR 212 (Rajasthan-Jaipur bench); (h) CIT vs. International Audio Visual Co. (2007) 288 ITR 570 (Del.); (i) CIT vs. Nath Bros. Exim International Ltd. (2007) 288 ITR 670 (Del.); (j) CIT vs. Shahabad Coop. Sugar Mills (2010) 322 ITR 73 (P H); (k) CIT vs. Sidhartha Enterprises (2010) 322 ITR 80 (P H); (l) CIT vs. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC); (m) CIT vs. Hindustan Hydraulics (2014) 369 ITR 255 (P H); and (n) CIT vs. Sewak Ice and Cold Storage P.Ltd. (2014) 369 ITR 316 (All). On the other hand, Shri Dhanjay Awasthi, the learned counsel for the Department has justified the impugned order. He submits that that assessee has wrongly made the claim for deduction. The assessee has not revised the return to drop the claim specially when in the earlier years, the claim for deduction under Section 80-IB(7A) was already rejected by the A.O. But repeatedly, the assessee is making the said claim. It is also a submission of the learned counsel for the Department that the failure of the assessee to file the revise return is without any bona-fide reason, hence, the penalty is justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate particulars and concluded that the Commissioner of Income-tax (Appeals) had rightly cancelled the penalty. The Revenue's appeal was consequently dismissed. Further the record, it appears that construction of the Multiplex had not been completed by 31.3.2002, although a part of it had been completed and the part so completed had started yielding income also. Section 80-IB(7A) specifically talks about construction and not commencing of business. The CIT(A) while deciding the issue of leviability of penalty under Section 271(1)(c) in favour of the assessee has specifically noted that in the financial year 2002-03, there was an investment in the project, relevant portion is reproduced hereunder : 6.4.4 After going through the case records submission made, I am of the considered view :- (i)that the issue decided by the A.O. and confirmed by the Ld. CIT(A) in the A.Y. 2002-03 revolved around date of commencement of business . This finding cold not ipso-facto be taken by the A.O. in A.Y. 2004-05 as a conclusive finding with regard to the period of construction of the multiplex theatre as envisaged under section 80IB(7). It was incumbent upon the A.O. to give specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal because no appeal was filed by the assessee before the Tribunal against this order of CIT(A) but it is also true that the assessee could have revised the return of income for the present year till 31/03/2008 and in that situation, there could not have been any occasion to levy any penalty but the assessee has chosen not to do so and hence, we find force in the contention of learned D.R. of the Revenue and also in the stand taken by the Assessing Officer that the assessee has concealed its income and therefore, penalty is justified under these facts. In view of the above, we are of the view that by making legal claim for deduction under Section 80-IB(7A) assessee is not guilty to concealment of income. In the earlier years, the A.O. himself has cancel the levy of the penalty for the similar reasons. When it is so, then the principal of consistency will have to be followed as per ratio laid down in the case of Radhasoami Satsang, 193 ITR 321 (SC). From the record, it also appears that the A.O. has not given any finding that the claim of the deduction was bogus. The A.O. has only stated that such claim was not leviable as the conditions envisaged under Section 80-IB(7A) wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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