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2008 (11) TMI 664 - AT - Income TaxPenalty u/s 271(1)(c) - Deduction u/s 80IA - concealment of income and furnishing of inaccurate particulars of such income in relation to the deduction claimed - CIT(A) deleted the penalty. HELD THAT:- On the strength of the reasoning adopted by the Hon'ble Madras High Court in CIT vs. Ashok Leyland Ltd.[1979 (7) TMI 18 - MADRAS HIGH COURT], the assessee canvassed before the AO that the profits in question were eligible for s. 80-IA benefits. Though the subsequent development in the case of the assessee shows that the said view has not found favour with the IT authorities. However, to say that the claim of the assessee made in the return of income was fanciful or was completely untenable, would be a misnomer. Therefore, in our considered opinion, the claim of the assessee made in the return of income could be said to have rested on a bona fide consideration. Nevertheless, having regard to the fact that the assessee had made adequate disclosure in the return of income which was accompanied by a report by the auditor and under the circumstances noted, the claim did not lack in bona fides. Whether the denial of the claim made in the return of income can lead to an automatic imposition of penalty under s. 271(1)(c) of the Act? - HELD THAT:- It is sufficient to say that the assessment proceedings and the subsequent penalty proceedings are independent proceedings. The findings and conclusions drawn by the authorities in the assessment proceedings are relevant but cannot be construed as conclusive so as to fasten the assessee with the charge of concealment of income and furnishing of inaccurate particulars thereof. A similar situation arose in the case of Deep Tools (P) Ltd.[2004 (8) TMI 52 - PUNJAB AND HARYANA HIGH COURT]. In the said case too, the assessee had staked claim for deduction u/s 80HHC, which was declined. The AO levied penalty u/s 271(1)(c). The stand of the assessee was that the claim was mistaken but was based on bona fide considerations. The Hon'ble High Court observed that the claim, though untenable, was based on the report of a chartered accountant in terms of s. 80HHC and the said fact led to the conclusion that it was a bona fide mistake. In our view, the said parity of reasoning is applicable in the present case too. In the case of T. Ashok Pai vs. CIT [2007 (5) TMI 199 - SUPREME COURT], Hon'ble Supreme Court also observed that the penalty u/s 271(1)(c) was not exigible where the claim of the assessee was based on the report of an expert. In the present case too, as observed earlier, the accounts of the assessee are duly audited. The return of income was accompanied by the audit report required u/s 80-IA and there is nothing to suggest, rather there is no charge against the assessee, that the report of the auditor was collusive. Therefore, we are in agreement with the conclusion of the CIT(A) that penalty u/s 271(1)(c) is not exigible in this case. Appeals of the Revenue are dismissed.
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