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TMI Blog2024 (12) TMI 1426X X X X Extracts X X X X X X X X Extracts X X X X ..... y u/s. 271(1)(c) of the Act is liable to be deleted on account of defective notice itself. Even on merits, assessee has a case. The assessee had claimed deduction u/s. 10B - During assessment proceedings the assessee surrender the claim. In computation of income and in Tax Audit Report filed along with return of income, the assessee had disclosed entire particulars. Merely, for the reason that the assessee has claimed deduction which according to the AO was not admissible to the assessee would not make a case for levy of penalty under section 271(1)(c). As decided in Reliance Petro Products P Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] mere making of a claim which is not sustainable in law by itself will not amount to furnishing inaccurate part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed along with Explanation 1, 2, 3, 4 and 5. The notice is defective as the Assessing Officer (AO) has not struck off irrelevant clause of section 271(1)(c) of the Act in the said notice, thus, making the notice ambiguous. In support of her submissions, the ld. AR placed reliance on following decisions: (i) CIT vs SSA s Emerald Meadows, 73 taxmann.com 241 (Karnataka); and (ii) CIT vs. Manjunath Cotton and Ginning Factory 359 ITR 565 (Karnataka). 4. The ld. AR further submits that even on merits penalty levied u/s. 271(1)(c) of the Act is unsustainable. The assessee had claimed deduction u/s. 10B of the Act in respect of 100% export oriented undertaking. The assessee had establishment an undertaking on 08.05.2003. The Finance Act 2000 prescri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re withheld by the assessee. Therefore, no penalty u/s. 271(1)(c) of the Act could have been levied. The ld. AR in support of his submissions placed reliance on decision in the case of CIT vs. Reliance Petro Products P Ltd., 322 ITR 158 (SC). 6. Per contra, Shri Rajesh Tiwari representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. 7. Both sides heard, orders of the authorities below examined. The solitary issue raised by the assessee in appeal is against levy of penalty u/s. 271(1)(c) of the Act in respect of disallowance of assessee s claim of deduction u/s. 10B of the Act. The assessee had claimed deduction of Rs. 57,17,737/-. During the course of assessment proceedings, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw that any ambiguity in notice for levy of penalty would vitiate penalty proceedings. Hence, penalty u/s. 271(1)(c) of the Act is liable to be deleted on account of defective notice itself. 9. Even on merits, I find that the assessee has a case. The assessee had claimed deduction u/s. 10B of the Act. During assessment proceedings the assessee surrender the claim. In computation of income and in Tax Audit Report filed along with return of income, the assessee had disclosed entire particulars. Merely, for the reason that the assessee has claimed deduction which according to the AO was not admissible to the assessee would not make a case for levy of penalty under section 271(1)(c) of the Act. The Hon'ble Apex Court in the case of Reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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