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TMI Blog2012 (10) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... 11,29,567/- where assessee furnished inaccurate particulars of incomes. b) Whether on the facts and circumstances of the case, Ld. Commissioner of Income Tax (A) was justified in holding that Assessing Officer was not justified in levying penalty u/s. 271(1)(c) where assessee willfully claimed excess deduction u/s. 80HHC. c) The appellant craves leave to add, alter or amend any / all the grounds of appeal before or during the course of hearing of the appeal. 3. The facts leading to the initiation of penalty proceedings are that while calculating the deduction u/s. 80HHC, the Assessing Officer noted that the assessee had taken profit from export of trading goods as nil whereas in facts there was loss of Rs.80,54,287/-, which accordingly t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on the issue for which penalty proceedings were initiated for wrongful determination of adjusted profit of the business for the claim u/s. 80HHC. In view of the above facts, the Assessing Officer observed that the concealment of income was due to the fact that the assessee while calculating the deduction u/s. 80HHC took the profit from export of trading goods at nil as against net loss of Rs.80,54,287/- which was to be adjusted while calculating the deduction u/s. 80HHC. The Assessing Officer has, therefore, held that due to the wrong submissions of the facts, the assessee had made a claim of deduction u/s. 80HHC at Rs.58,60,336/- as the actual deduction worked by the Assessing Officer in his order u/s. 143(3)/147 at Rs.29,26,395/-, lead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April, 1998. It was also made clear that if there was direct loss in export, such loss has to be set off against the incentive profits. Therefore, the interpretation that where there was a loss, it could be treated as nil for arriving at eligible profits was not possible. The provision to treat loss as nil was made retrospective from 1st April, 1992 when incentive profit related to (iiia), (iiib) and (iiic). The same provision will apply for the incentives now included in (iiid) and (iiie). This inclusion was, however, effective from 1st April, 1998. Those amendments were made to dilute the effect of the Hon'ble Supreme Court decision in IPCA Laboratory Ltd. vs. DCIT 266 ITR 521 wherein the Hon'ble Apex Court has held that an assessee who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the ratio of the Hon'ble Delhi High Court jdugement in the case of C.I.T. vs. Sil Investment Ltd. (2011). In view of aforesaid discussion, I hold that the penalty of Rs.11,29,567/- levied by Assessing Officer u/s. 271(1)(c) is not justified. Accordingly, the penalty u/s. 271(1)(c) levied by the Assessing Officer is deleted." 5. Against the above order the Revenue is in appeal before us. 6. We have heard the rival contentions and perused the records. We find in this case that disallowance has resulted on account of retrospective amendment in section 80HHC by way of Taxation Laws (second amendment) Act, 2005 with retrospective effect from 1.4.98. Ld. Commissioner of Income Tax (A) has given a categorical finding that these provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act, or where the breach flows fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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