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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 ..... where no depreciation was claimed on capital expenditure. But the A.O. suo moto has allowed the depreciation by taking view that the "trial runs" having been carried out by the assessee, so the project is complete. For assessment year 2003-04 onwards, the assessee has claimed deduction under Section 80-IB(7A)of the Income Tax Act though, there was no positive income. Similarly, in the assessment year 2004-05, the assessee has claimed the deduction under Section 80-IB (7A) of the Act, but the same was denied by the A.O. For the assessment year under consideration (2006-07), the appellant was advised to claim the deduction under Section 80-IB(7A) of the Act, for the reason that the A.O. in the assessment year 2002-03, has considered the completion of project. For the purpose, the assessee has submitted audit report in the prescribed form 10CCBA of the Income Tax Rules, 1962. However, the claim was rejected by the A.O. vide order dated 26.12.2008. At the sametime, the A.O. has opined that the assessee has wrongly made the above claim which amounts the concealment of income, so he levied the penalty under Section 271(1)(c). But, the C.I.T.(A) has cancelled the levy of the penalty b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... municipality, municipal corporation, notified area committee or a cantonment board or by any other name) of Chennai, Delhi, Mumbai or Kolkata; (b) the deduction under clause (a) shall be allowable only if- (i) such multiplex theatre is constructed at any time during the period beginning on the 1st day of April, 2002 and ending on the 31st day of March, 2005; (ii) the business of the multiplex theatre is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of any building or of any machinery or of plant previously used for any purpose; (iii) the assessee furnishes alongwith the return of income, the report of an audit in such form and containing such particulars as may be prescribed and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed." After reading the provision, he submits that the assessee had never furnished inaccurate particulars of income as appears from the assessment order. According to the learned counsel, in the case of penalty, proceedings under Section 271(1)(c) are separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is justified. Since, no defects have been shown by the assessee in the return filed, therefore, the case laws cited by the assessee are not applicable in the instant case. To support his argument, he relied on the ratio laid down in the following cases : (a) Ashish Kumar vs. CIT [2014] 43 Taxmann 92 (P&H); (b) CIT vs. HCIL Kalindee Arsspl (2013) 37 Taxmann 347(Del); and (c) Standard Hind Co. vs. CIT (2012) 22 Taxmann 62 (Alld). We heard both the parties at length and gone through the materials available on record. From the record, it appears that penalty was levied by the A.O. by observing that the assessee had made a wrong claim under Section 80-IB(7A). The Tribunal has confirmed the said penalty by observing that the assessee has not revised its return, so the penalty is justified. But fact remains that the assessment proceedings and penalty proceedings are quite different. The findings are not binding on each other as per ratio laid down in the case of Durga Kamal Rice Mill vs. CIT 265 ITR 25 (Calcutta). While discussing the explanation 1 of Section 271(1)(c), the Hon'ble Rajasthan High Court opined that in the debatable claims, no penalty can be levied (CIT vs. Harshv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indings in this regard especially when the appellant had submitted that there was construction of value exceeding Rs. 4.12 crore in subsequent years (including F.Y. 2002-03). In this view of the matter, it cannot be said that the impugned claimed made by the assessee was a bogus claim or a claim that was wholly untenable." It may be mentioned that the penalty can be imposed only when there was some element of deliberate default and not a mere mistake. The finding had been recorded on the facts that the furnishing of inaccurate particulars was simply a mistake and not a deliberate attempt to evade tax. It is pertinent to mention that an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in concious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. In the audit report in Form 10CCBA relevant to the assessment year 2006-07 (year under appeal here) also the date of completion of construction has be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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