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2015 (9) TMI 1360 - PUNJAB AND HARYANA HIGH COURT

2015 (9) TMI 1360 - PUNJAB AND HARYANA HIGH COURT - TMI - Penalty under Section 271(1)(c) - disallowance under Section 80IB was made by the Assessing Officer not because of any difference of opinion but because such deduction was not available to the assessee by virtue of specific provision of law - ITAT deleted the penalty - Held that:- The CIT(A) as well as the Tribunal had concurrently concluded that the assessee in the computation of income while claiming deduction under Section 80IB of the .....

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value of exclusive plant and machinery as on 1.4.2004 was ₹ 2.93 crores and because of the addition made in the assessment year under appeal of ₹ 58.33 lacs, the total investment came to ₹ 3.51 crores. In such circumstances, it could not be said that the assessee had not made a bonafide claim of deduction under Section 80IB of the Act. Therefore, the penalty was rightly deleted by CIT(A) and upheld by the Tribunal. We do not find any error in the approach adopted by the CIT(A) .....

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05-06, claiming following substantial questions of law - 1. Whether, in the facts and circumstances of the case, the Hon'ble ITAT was legally justified in deleting the penalty of ₹ 10,84,050/- imposed under Section 271(1)(c) of the Act without appreciating that the disallowance under Section 80IB was made by the Assessing Officer not because of any difference of opinion but because such deduction was not available to the assessee by virtue of specific provision of law and therefore the .....

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or the decision of the controversy involved as narrated in the appeal may be noticed The assessee was in the business of manufacturing of bulk drugs and fine chemicals. During the year under consideration, the assessee had claimed deduction under section 80IB of the Act of ₹ 29,62,491/-. It was found that the assessee had claimed its unit as small scale industry. However, investment in plant and machinery was ₹ 351.59 lacs. The assessee was asked to explain how its unit was small sca .....

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accurate particulars of its income, penalty proceedings under section 271(1)(c) of the Act had also been initiated. During the course of penalty proceedings, the Assessing Officer after considering the facts of the case as well as legal position concluded that the assessee had concealed the particulars of income to the tune of ₹ 29,62,491/-. Therefore, the Assessing Officer imposed penalty under Section 271(1)(c) of the Act at the rate of 100% of the tax sought to be evaded which came to & .....

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it could not be said to be concealment of income or furnishing of inaccurate particulars. Not satisfied with the order, the revenue filed appeal before the Tribunal. Vide order dated 18.11.2014, Annexure A.3, the appeal was dismissed. Hence the instant appeal. 3. We have heard learned counsel for the appellant-revenue. 4. Learned counsel for the revenue submitted that vide Order F.No.10/6/97/1P dated 10.12.1997, the Ministry of Industry fixed the investment limit in fixed assets in plant and mac .....

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eal by the CIT(A). It was further contended that in such circumstances, levy of penalty under section 271(1)(c) of the Act on account of concealment of income had been rightly imposed by the Assessing Officer. However, CIT(A) as well as the Tribunal had erroneously recorded a finding that the assessee had bonafide claimed the said deduction and deleted the penalty. 5. After hearing learned counsel for the revenue, we do not find any merit in the appeal. 6. The CIT(A) while accepting the appeal o .....

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of it being a small scale undertaking was false. As per section 271(1)(c), penalty is to be levied if the assessee has concealed particulars of income or has furnished inaccurate particulars of such income. 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 80IB(3) in the status of a small scale industry. This was found to be incorrect as per the .....

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tion. Furthermore, assessee stated that as all particulars of its plant and machinery as well as the calculation of deduction under Section 80IB was furnished in the return of income, so it could not be said that particulars of income were concealed or filed inaccurately. Here a claim has been made which was found to be incorrect. This claim was on the basis of certificate issued by the auditor in the requisite form 1OCCB. The violation is the investment in plant and machinery exceeded the limit .....

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any concealment of income nor furnishing of inaccurate particulars of its income. The penalty levied is therefore directed to be deleted. 7. The said findings were affirmed by the Tribunal vide order dated 18.11.2014, Annexure A.3 as under- 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 CIT(Appeals) in cancelling the penalty under Section 271(1(c) of the Act. The assessee while making claim of .....

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essee, the value of exclusive plant and machinery as on 1.4.2004 was ₹ 2.93 crores and because of the addition made in the assessment year under appeal of ₹ 58.33 lacs, 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 80IB earlier and it is only because of some additions made in year under consideration, the assessee would not have qualified for deduction under Secti .....

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