TMI Blog2014 (11) TMI 981X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was also favourable to the assessee. In the case of the assessee, the value of exclusive plant and machinery as on April 1, 2004 was ₹ 2.93 crores and because of the addition made in the assessment year under appeal of ₹ 58.33 lakhs, the total investment comes to ₹ 3.51 crores. It is, therefore, clear that the assessee was small scale industrial unit and was entitled for deduction under section 80-IB earlier and it is only because of some additions made in year under consideration, the assessee would not have qualified for deduction under section 80-IB of the Act. The assessee, therefore, made a bona fide claim to deduction under section 80-IB as per the notification issued lastly which covered such unit upto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t prescribed, hence, the assessee had made wrong claim of deduction under section 80-IB(3), therefore, vide separate order, penalty under section 271(1)(c) of the Act was levied. The assessee challenged the levy of penalty before the learned Commissioner of Income-tax (Appeals) and the written submission of the assessee is incorporated in the appellate order in which the assessee briefly explained that all particulars were disclosed in the return of income as well as at the assessment stage for claim of deduction under section 80-IB of the Act. Therefore, it is not a case of concealment of income or filing inaccurate particulars of income. The assessee-company is in the business of manufacturing of bulk drugs and fine chemicals. The deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te particulars of such income. The assessee has contended that the penalty was not sustainable as the charge contemplated under section 271(1)(c) is not clear. Be that as it is, it is a fact that deduction has been claimed under section 80-IB(3) in the status of a small scale industry. This was found to be incorrect as per the notification of the Ministry of Industry for small scale units. The investment in plant and machinery was found to be exceeding the prescribed limit. It is the assessee's contention that it was under bona-fide belief that it was a small scale industry in view of the various confusing notifications of the Ministry which changed from time and again. It was also emphasised that the books were duly audite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, penalty was leviable under section 271(1)(c) of the Act. He has submitted that since claim of deduction was not bona fide, therefore, it amounts to concealment of income and relied upon decision of the Delhi High Court in the case of CIT v. Zoom Communication P. Ltd. [2010] 327 ITR 510 (Delhi). The learned Departmental representative also relied upon decision in the case of CIT v. Escorts Finance Ltd. [2010] 328 ITR 44 (Delhi), the decision in the case of Krishna Kumari Chamanlal v. CIT [1996] 217 ITR 645 (Bom), the decision in the case of Rajaram and Co. v. CIT [1992] 193 ITR 614 (Guj) and the decision in the case of Beena Metals v. CIT [1999] 240 ITR 222 (Ker). 5. On the other hand, learned counsel for the assessee reiterated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 5 crores was made applicable to all the items of drugs and pharmaceuticals. The assessee has investment lesser than ₹ 5 crores and made a bona fide claim of deduction under section 80-IB of the Act. The assessee has not filed any inaccurate particulars of income and has not concealed the particulars of income. The claim of the assessee was bona fide as per interpretation of various notifications issued time to time. He has relied upon decision of the hon'ble Supreme Court in the case of Price Waterhouse Coopers P. Ltd. v. CIT [2012] 348 ITR 306 (SC) in which it was held : Imposition of penalty would be unwarranted in a case where the assessee had committed an inadvertent and bona fide error and had not inten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 271(1)(c) is not leviable simply because the claim of deduction has been rejected on certain debatable issues. 9. We have considered rival submissions and material available on record and do not find any justification to interfere with the order of the learned Commissioner of Income-tax (Appeals) in cancelling the penalty under section 271(1)(c) of the Act. The assessee while making claim of deduction under section 80-IB of the Act in computation of income disclosed complete facts and claimed to have permanent registration as small scale unit issued by the District Industries Centre, Patiala. The claim of the assessee was qualified by the auditor as well. The assessee referred to various notifications issued by the concerned Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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