TMI Blog2012 (11) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant claimed deduction on the basis of auditor as per statutory requirement and further appellant disclosed all material facts, hence penalty is not applicable. As decided in U.O.I. vs. Dharmendra Textiles Processors [2008 (9) TMI 52 - SUPREME COURT] at penalty proceedings are separate than assessment proceedings and in the case of Income tax proceedings, these penalty proceedings are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef facts are that assessee is engaged in business of chemical. The assessee filed its return of income declaring total income of Rs.11,06,080/- along with audited accounts report u/s. 44AB of the Act. Subsequently the assessment was reopened u/s. 143(3) r.w.s. 147 of the Act. The penalty proceedings were also initiated and penalty was imposed on the basis that disallowance was made u/s. 80HHC for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be reasoned with the ratio of those case laws. In fact, the appellant during the appellate proceedings, has given direct judgement applicable in the case of appellant. Decision of Hon ble Delhi High Court in the case of CIT vs. Pawan Kr. Jain (2008) 298 ITR 443 and CIT vs. Shri Ram Honda Power Equipment (2007) 289 ITR 475 clearly shows that neeting of interest with establishment of nexus in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance made u/s. 80HGHC and penalty imposed for the same that since issue involved for disallowance is debatable (DPB eligibility of deduction) hence penalty cannot be imposed. This being a direct judgement whose ratio is squarely in the case of appellant. Hon ble Delhi High Court in the case of CIT vs. S. Dhanabal (2009) 309 ITR 268 held in respect of penalty imposed for disallowance u/s. 80HH ..... X X X X Extracts X X X X X X X X Extracts X X X X
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