TMI Blog2013 (5) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... taining finality on the quantum additions against the assessee is no issue for confirming the penalties. As such there exists dispute on the debatable nature of the said provisions. As per the judgment of CIT vs. Reliance Petroproducts Pvt. Ltd. (2010 (3) TMI 80 - SUPREME COURT), it is a settled law that no penalty should be levied when the issue is a debatable one and when the claim is wrongly made in the return of income. Considering the settled nature of the issue, CIT (A) has rightly deleted the penalty made by the AO u/s 271(1)(c) and it does not call for any interference. Against Revenue. - I.T.A. NO. 320/M/2011, I.T.A. NO. 321/M/2011, I.T.A. NO. 322/M/2011, I.T.A. NO. 323/M/2011, I.T.A. NO. 324/M/2011 - - - Dated:- 3-4-2013 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2007 was clarificatory in nature and was made applicable with retrospective effect from 1.4.2000. 3. On the facts and in the circumstances of the case and in law, the CIT (A) erred in deleting the penalty u/s 271(1)(c) of the IT Act, 1961 ignoring that the facts of this case were distinguishable from those of CIT vs. Reliance Petro Products Pvt. Ltd. in as much as in that case, the issue was relating to claim of expenses whereas in this case the issue pertained to patently inadmissible claim of deduction under the provisions of deduction u/s 80-IB. 4. The appellant prays that the order of the CIT (A) on the above ground be set aside and that of the Assessing Officer be restored. 3. Briefly stated relevant facts of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated in the assessment orders for disallowing the claims made under section 80-IA of the Act, the reasons stated by the appellant for accepting the decision of the Assessing Officer with regard to the disallowance of the claims under the section 80-IA of the Act, the stand taken by the Assessing Officer in the penalty and various contentions raised by the Ld Authorized Representative of the appellant in the written submissions filed during the appeal hearing proceedings. It is an admitted fact that the appellant company has been engaged in the business activities relating to the development of infrastructure as a contractor. It is also a fact that the appellant company has been making claims for deduction u/s section 80-IA of the Act for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the returns of income do not constitute concealment for the purpose of levy of penalty. In the case of the appellant the claims for deduction made u/s 80-IA of the Income Tax Act are found to be debatable. The facts as brought out in the assessment orders as well as in the penalty orders in respect of the appellant do not establish any concealment of income or furnishing of inaccurate particulars which has to form the basis for levy of penalty u/s 271(1)(c) of the IT Act. In view of the forgoing, I hereby cancel the penalties levied u/s 271(1)(c) of the IT Act in respect of all the assessment years. 4.1. Aggrieved with the decision of the CIT (A), Revenue is in appeal before the Tribunal. 5. During the proceedings before us Shri V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... humbly submitted that the assessee company was under a bonafide belief that it is eligible for deduction u/s 80-IA of the Act. Moreover, from the decisions cited above, it is clearly evident that the said issue is a highly debatable one. It is well settled law that no penalty u/s 271(1)(c) can be levied when the issue is a debatable one. Yor Honours, kind attention is invited to the decision ofa the Hon ble Supreme Court in thecae of CIT vs. Reliance Petroproducts (322 ITR 158) in which it was held as under (Head Note): A mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing accurate particulars regarding the income of assessee. Such a claim in the return cannot amount to furnishing in accura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the appeal on quantum additions if were to file. Therefore, the attaining finality on the quantum additions against the assessee is no issue for confirming the penalties. As such there exists dispute on the debatable nature of the said provisions. As per the judgment of the Hon ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. (322 ITR 158), it is a settled law that no penalty should be levied when the issue is a debatable one and when the claim is wrongly made in the return of income. Considering the settled nature of the issue, CIT (A) has rightly deleted the penalty made by the AO u/s 271(1)(c) of the Act and it does not call for any interference. Accordingly, grounds raised by the Revenue are dismissed. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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