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TMI Blog2016 (3) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... en disclosed and assessee’s explanation is bonafide on facts and circumstances of the case. The issue is also debatable issue, no penalty U/s 271(1)(c) of the Act can be imposed. Hon’ble Delhi High Court in the case of CIT Vs. Nalwa Sons Investments Ltd. (2010 (8) TMI 40 - DELHI HIGH COURT ) has held that any addition in regular assessment and thereafter the case is assessed U/s 115JB and finally tax paid by the assessee on the basis of Section 115JB of the Act. The concealment on account of any regular assessment, does not lead to evade the tax at all. Therefore, penalty U/s 271(1)(c) is not justified. In this year also, the assessee has disclosed all the particulars of income in return alongwith audit report. The matter is whether int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and NSC at ₹ 32,94,630/- and in A.Y. 2008-09, these receipts were ₹ 56,55,228/-. The assessee had claimed deduction U/s 10B of the Act on it. The Assessing Officer in quantum addition had observed that these receipts were not business income and cannot be treated as income derived from the export business. Therefore, deduction U/s 10B was not allowed in both the years on the receipt. The ld CIT(A) in both the years have confirmed the addition made on account of interest not considered as derived income for computing deduction U/s 10B. Before imposing penalty U/s 271(1)(c) of the Act, he gave reasonable opportunity of being heard. The assessee submitted reply in both the years. After considering the assessee s reply, the ld Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Supreme Court decision in the case of Dharmendra Textile Processors Others (2008) 306 ITR 277 (SC) wherein it has been held that penalty proceeding are no longer quasi criminal proceedings and hence, the presence of mens rea is not required to be established. The addition has been confirmed by the ld CIT(A) and the assessee had claimed excess deduction U/s 10B. The explanation filed by the assessee was not bonafide. Therefore, the explanation-1 of Section 271(1)(c) is squarely applicable. Accordingly, the Assessing Officer imposed minimum penalty @ 100% on tax sought to be evaded at ₹ 10,90,368/- in A.Y. 2007-08 and ₹ 50,89,705/- in A.Y. 2008-09. 3. Being aggrieved by the order of the Assessing Officer, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain income which was not found to be in accordance with the provisions of the I.T. Act and the claim of exemption on this amount was, accordingly, denied. This disallowance of exemption was upheld by the Hon ble Tribunal as well. However, as held by the Apex Court in the case of Reliance Petro products Pvt. Ltd. (322 ITR 158), merely making a claim in return of income which is not sustained under the law does not amount to furnishing of inaccurate particulars regarding the assessee s income or concealment of income. The penalty for concealment in this case appears to have been levied mechanically. In view of the facts of the case, the levy of penalty of 271(l)(c) appears to be unjustified and is, accordingly, cancelled. Sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B on interest receipt on FDR/NSC is evident from the copy of the profit loss account, Audit report in Form No. 56G and the return of income. Thus no facts are concealed and therefore on the reduction in the claim of exemption u/s 10B, no penalty is leviable. For this reliance is placed on the following cases:- (i) Reliance Petro products Pvt. Ltd. 322 ITR 158 (SC) (ii) CIT Vs. Caplin Point Laboratories Ltd. 293 ITR 524 (Mad.) (HC) (iii) CIT VS. Lotus Trans Travels (P) Ltd. 177 Taxman 37 (Del.) (HC) The ld AR has further submitted that the assessee filed the return on 29.09.2008. On this date there were judgments in favor of the assessee allowing the claim of exemption u/s 10B by considering that after considering the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exemption u/s 10B on interest income, the effect in the reduction of such claim is only ₹ 523 as per the table given at Paper Book Pg 1A. In view of the above, CIT(A) has rightly cancelled the penalty and therefore his order be upheld by dismissing the ground of the department. 6. We have heard the rival contentions of both the parties and perused the material available on the record. The assessee had furnished details of interest in return and in audit report, therefore, no particulars of income have been concealed. The matter is debatable on the deduction U/s 10B is allowable on interest income or not, as such, the assessee had claimed that these receipts are directly linked with the export business. However, the explanation o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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