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TMI Blog2024 (10) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Appellant : Shri. Niraj Seth. AR For the Respondent : Shri. Krishna kumar. Sr. DR ORDER PER PAVAN KUMAR GADALE - JM: The appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi / CIT(A) passed U/sec 271(1)(c) and u/sec 250 of the Act. The assessee has raised the following grounds of appeal: 1. Having regard to the facts and circumstances of the case and in law, the Ld. Commissioner of Income tax (Appeals)-21 has erred in confirming the order of Assessing officer, imposing penalty of Rs. 9,28,086 under section 271(1)(c) of Income tax Act, unjustified, unwarranted and bad in law stating that the Appellant has concealed the particulars of his income whereas the income finally assessed by Ld. AO is the same as has been declared by the appellant i.e. Rs. 30,03,517 in response to notice u/s. 148 of the Income tax Act. It is submitted that: 1.1 The Ld. AO issued the notice u/s. 271(1)(c) on 5.10.2018 which has been responded by the appellant vide its letter dated 21.11.2018. The Ld. AO further issued notice on 24.02.2020 (whereas Ld. AO mentioned the date in his order dtd. 24.10.2021 which was incorrect) which has also been responded by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r claiming the deduction under u/sec 80IB(10) of the Act of Rs. 50,91,09/-. In the assessment proceedings, the A.O. find that the deduction claimed should be disallowed as there is a violation of the provisions of the Act. The A.O. has dealt on the facts, submissions and applicable provisions of the Act and observed that the assessee is not eligible for claiming deduction under Section 80IB(10) of the Act as the assessee has allotted more than one flat to same individual or any of his relative as prescribed under section 80IB(10) of the Act and the A.O has denied the deduction for the entire project and assessed the total income of Rs. 80,94,610/- and passed the order u/sec 143(3) r.w.s 147 of the Act dated 08.12.2017. 3. Subsequently, the Assessing Officer has initiated penalty proceedings under Section 271(1)(c) of the Act and issued notice. The AO has relied on the findings of the assessment proceedings u/sec 143(3) r.w.s 147 of the Act. Further against denial of deduction u/sec 80IB(10) of the Act, the assessee has filed an appeal to the CIT(A), Whereas the CIT(A) has directed the assessing officer to calculate the proportionate disallowance of claim of deduction u/sec 80IB(10) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Page 50 of the paper book. The Ld. AR emphasized that the assessee has claimed the similar deduction u/sec 80IB(10) of the Act in the A.Y. 2012-13 A.Y. 2014-15 and on the similar grounds the relief was granted and no penalty was levied u/s 271(1)(c) of the Act and the Ld.AR demonstrated the details in the paper book-II. Since the facts of the present case are similar to the earlier years hence the penalty cannot be levied. Further the Ld. AR referred to the assessment order u/sec 143(3) of the Act for the A.Y 2014-15 on similar disallowance u/sec 80(IB)(10) of the Act and on further appeal, the CIT(A) relied on the order of A.Y. 2012-13 and deleted the disallowance u/sec 80(IB) of the Act and penalty was not levied. We find in the quantum appeal, the CIT(A) has considered in assessee s own case where the deduction was allowed proportionately dealt at Page 11 Para 5 6 of the order read as under: 5.0 The only ground of appeal filed the appellant is against the disallowance of deduction clalm u/s. 80IB(10) of the Act. 5.1 In this case, the AO has disallowed the claim of deduction u/s 80IB(10) of Rs. 80,16,236/-, since the appellant has sold/allotted more than one flat to same indivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except in cases where more than one flat was sold to an individual/entity. 6.0 In the result, appeal of the appellant is partly allowed. Order passed under section 250(read with section 251 of the Income Tax Act, 19616 7. We find that the claim of the assessee is in consideration of the financial statements and the assessee adopted one of the possible views and has made similar claims in the earlier years and penalty was not levied. We are of the view that penalty cannot be automatic and every addition/disallowance in the assessment proceedings cannot be gate way for levy of penalty and relay on the decision of Hon ble Karnataka High Court in the case of the CIT Vs. Manjunatha Cotton and Ginning factory, [2013] 359 ITR 564 (Kar). Further the assessee has made a claim under the bonafide belief that it is allowable under the law. We also rely on the decision of the Hon ble Supreme Court in the case of CIT Vs. Reliance Petroleum Products Ltd., 322 ITR 158(SC) and the observations are read as under: 271(1) If the A.O or the commissioner (Appeals) or the commissioner in the course of any proceedings under the Act, is satisfied that any person (c) has concealed the particular of his inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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