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TMI Blog2009 (4) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... yr. 200304 whereas M/s Yati Overseas is challenging the order of learned CIT(A), dt. 27th Oct., 2008 in asst. yr. 2003-04. In all these appeals, the assessees are impugning the levy of penalty under s. 271(1)(c) of the Act. The facts on all vital points are common in all the appeals. There is no specific dispute on facts between the parties. The assessees at the relevant time were engaged in manufacturing and export of carpets. Because of their export activities, they are entitled to incentive in the shape of duty drawback and DEPB. M/s Mayur Overseas filed its return of income on 30th Oct., 2004 whereas M/s Raj Overseas and M/s Yati Overseas have filed their returns of income on 31st Oct., 2003. They have submitted the audit report obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessees. Shri Ved Jain, learned counsel for the assessees submitted that Tribunal has heard two appeals of M/s Oriental Rug Company on 2nd April, 2009 on identical issues where penalties have been deleted. He submitted that facts and circumstances are common with the case of M/s Oriental Rug Company. Shri Satish Kumar Goel, learned counsel for the assessee in the cases of M/s Raj Overseas and M/s Yati Overseas has submitted that SLP bearing Nos. 29962 of 2008 and 29432 of 2008 have been admitted by the Hon ble Supreme Court in the case of M/s Raj Overseas and M/s Yati Overseas against the disallowance of deduction admissible under s. 80-IB of the Act on export incentives. Therefore, it reasonably exhibits that admissibility of deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposed a penalty under s. 271(1)(c) of the Act in the cases of all the assessees. Appeal to the CIT(A) did not bring any relief to the assessee. Learned first appellate authority has confirmed the penalty by relying upon the decision of Hon ble Punjab Haryana High Court in the case of Liberty India (supra). Shri Ved Jain, learned counsel for the assessee in the cases of Oriental Rug Company has raised four-fold submissions. He firstly contended that there is no concealment made by the assessee. All the particulars were duly disclosed by the assessee along with the return of income. The disallowance has been made on the basis of the information disclosed by the assessee. He pointed out that once an assessee has made a bona fide claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2006) 10 SOT 178 (Del) has held that duty drawbacks are eligible for deduction under s. 80-IB. The Hon ble Delhi High Court has upheld this order and the judgment is CIT vs. Eltek SGS (P) Ltd. (2008) 215 CTR (Del) 279 : (2008) 3 DTR (Del) 241 : (2008) 300 ITR 6 (Del). He also pointed out that there were large number of orders at the level of Tribunal wherein it has been held that deduction under s. 80-IB would be admissible on incentives. The contrary view was taken by the Tribunal in the case of Liberty India (supra) and this view has been upheld by the Hon ble Punjab Haryana High Court. The assessees have filed their returns in 2001 and 2002 and the decision of Hon ble High Court came in September, 2006 i.e., subsequent to the filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 257 : (2005) 274 ITR 603 (P H). He further relied upon the order of the Tribunal in the case of Panchratna Hotels (P) Ltd. vs. Dy. CIT (1993) 47 TTJ (Ahd) 282 and Mohan Co-operative Industrial Estate Ltd. vs. Asstt. CIT (1994) 50 TTJ (Del) 504. He also relied upon the order of the Tribunal, Chennai, rendered in the case of Gem Granites (Karnataka) vs. Dy. CIT (2009) 18 DTR (Chennai)(Trib) 358 wherein it has been held that penalty is not automatic. If an assessee has made a bona fide claim of deduction then penalty cannot be levied. The learned counsel for the assessee placed on record copies of all these orders/judgments in the compilation. On the other hand, learned Departmental Representative relied upon the orders of the Revenue author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes (supra) has held that deduction under s. 80-IB would not be admissible to the assessee. The SLPs have been filed against the decisions of Hon ble Punjab Haryana High Court as well as against the decisions of Hon ble Delhi High Court in the Hon ble Supreme Court which stand admitted as informed by the learned representative of the assessee. Thus, prima facie, it indicates that this issue was a debatable one. Hon ble Punjab Haryana High Court in the case of CIT vs. Budhewal Co-operative Sugar Mills Ltd. (supra) has held that if an assessee has made a bona fide claim on the basis of law laid down by various Hon ble High Courts then penalty would not be levied upon such an assessee merely on the ground that his claim was disallowed. Sim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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