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Kothari Products Ltd. Versus ACIT, Central Circle I, Kanpur

2015 (12) TMI 102 - ITAT LUCKNOW

Penalty u/s 271(1)(c) - deduction under section 80-I denied - Held that:- As evident from the record that the assessee has filed returns of income for the impugned assessment years claiming deduction under section 80I of the Act after the order of the Tribunal. Therefore, the assessee has a reasonable belief that it is entitled for deduction under section 80I of the Act. The legal position has been changed after the judgment of the Hon'ble High Court of Allahabad in the assessee’s case in the ye .....

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either concealment of income nor furnishing of inaccurate particulars on the part of the assessee.

Under these circumstances, we are of the considered view that the Revenue has wrongly levied the penalty under section 271(1)(c) of the Act in the impugned assessment years whereas the assessee has claimed deduction under section 80I of the Act on the basis of the order of the Tribunal. - Decided in favour of assessee. - ITA No.861 & 862/LKW/2014, ITA No.863 to 868/LKW/2014 - Dated:- 11- .....

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penalty was levied on disallowance of deduction claimed under section 80I of the Act. We, however, for the sake of reference extract the grounds raised in I.T.A. No. 861/LKW/2014 as under:- 1. That the Ld. CIT(A)-I, Kanpur erred in law as well as on facts in rejecting the appellant's appeal and upholding penalty of ₹ 60 lacs imposed in its case u/s 271(1)(c), without appreciating that fact that no penalty u/s 271(1)(c) was initiated by the A.O. in the Assessment Order passed u/s 143(3) .....

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ing the technical objections raised by the appellant, has resorted to use of cursory and derogatory remarks in the Appellate Order, which is against the principles of natural justice. 4. That the Ld. CIT(A)-I, Kanpur erred in law as well as on facts in not appreciating that the Proceedings u/s 271(1)(c) were barred by limitation. 5. That the Ld. CIT(A)-I, Kanpur erred in law as well as on facts in not appreciating that even on merits, the provisions of section 271(1)(c) were not applicable to th .....

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o in the course of the assessment proceedings. 7. That the Ld.CIT(A)-I, Kanpur erred in law as well as on facts in not appreciating that appellant's claim u/s 80-I was supported by the fact that the same claim was allowed in its case for A.Y. 1987-88 by the Hon'ble ITAT in the appellant's own case. 8. That the Ld. CIT(A)-I, Kanpur failed to appreciate that the claim u/s 80-I of the Act was in fact subject matter of a SLP which has already been admitted by the Hon'ble Supreme Cour .....

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well as on facts in not appreciating that the claim of the appellant was also supported by a Certificate from an Independent Chartered Accountant. 11. That the Ld CIT(A) has failed to appreciate that at the time of filing the return for the above said year, there was already an order of the Hon'ble ITAT in favour of allowance of claim u/s 80-I of the appellant and there was no order against the appellant. The order of the Hon'ble High Court came as late as 16.10.2012, much after filing .....

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and Supreme Court there can be no levy of penalty u/s 271(1)(c). 3. During the course of hearing of the appeals, the ld. counsel for the assessee has invited our attention to certain facts. In the assessee s case way back in 1991, vide order dated 21.2.2991 in the case of Kothari Products Ltd., Kanpur vs. ACIT, Kanpur in I.T.A. No. 1509/Alld/1990 for assessment year 1988-89, the Tribunal has held that the assessee, engaged in manufacturing of Sada Pan Masala, is entitled for deduction under sect .....

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d. The claim of the assessees was disallowed, as the Revenue has not accepted the order of the Tribunal. Later on vide order dated 16.10.2012, the Hon'ble High Court of Allahabad has taken a contrary view in the case of CIT vs. M/s Kothari Pouches Ltd. holding therein that the assessee is not entitled for deduction under section 80I of the Act. Copy of the same is available at pages 113 to 122 of the compilation of the assessee. This order was followed in the case of CIT vs. Kothari Products .....

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he penalty levied by the Assessing Officer was also confirmed by the ld. CIT(A) following the aforesaid judgment of the Hon'ble High Court of Allahabad. 5. The ld. counsel for the assessee has contended that since the assessee has claimed deduction under section 80I of the Act on the basis of the order of the Tribunal for assessment year 1988-89, in which the claim of the assessee was allowed, there is no concealment or furnishing of inaccurate particulars on the part of the assessee. Moreov .....

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kani Gordhan Dass & Co. vs. CIT, 200 ITR 678. 5. CIT vs. Ajaib Singh and Co, 253 ITR 630 (P&H). 6. CIT vs. Calcutta Credit Corporation, 166 ITR 29 (Cal.). 7. CIT vs. Harshvardhan Chemical and Minerals Ltd., 259 ITR 212 (Raj.) 8. CIT vs. Indian Metals and Ferro Alloys Ltd., 211 ITR 35 (Ori.) 6. The ld. D.R. has simply placed reliance upon the orders of the ld. CIT(A). 7. Having carefully examined the orders of the lower authorities in the light of the rival submissions, we find that undis .....

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