TMI Blog2015 (12) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... mendment was made by the Finance Act, 2007 and approved by the Hon'ble President of India on 12.5.2007, with retrospective effect from 1.4.2000. Moreover, on the basis of retrospective amendment, the assessee had revised its computation during the assessment proceedings and withdrawn the deduction claimed u/s 80IA(4). Thus it was not a fit case for levying penalty u/s. 271(1)(c), thus no interference is called for in the order of Ld CIT(A) in deleting the penalty levied - Decided against revenue - ITA NO.801/Mum/2011 - - - Dated:- 13-10-2015 - Shri Amit Shukla, Judicial Member, and Shri Ashwani Taneja, Accountant Member For The Revenue : Shri S.S. Kumaran (DR) For The Respondent : None (AR) ORDER Per Ashwani Taneja (Accountant Member): The present appeal has been filed by the Revenue against the orders of Ld. Commissioner of Income Tax (Appeals) -41, Mumbai {In short, CIT(A) }, for the assessment year 2006-07 dated 01.11.2010, decided against the penalty order passed by the Assessing Officer (in short AO ) u/s 271(1)(c) of the Act. The solitary ground raised by the revenue is reproduced below: 1. Whether on the facts and in the circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the claim of deduction under section 80-IA(4) was a subject matter of dispute/debate having contrary views and the appellant having considered that it is eligible for claiming the deduction cannot be said to have either concealed the particulars of income or filed inaccurate particulars of such income. The appellant submits that in the case of ACIT V Bharat Udyog Ltd. ( 123 ITR TTJ 689 (TMum) it was held that assessee having entered into agreement with the Government agencies for deduction for development of projects is obviously a contract but that does not derogate the assessee from being a developer and claim for deduction under section 80-IA(4) cannot be denied. The appellant submits that the Explanation to section 80-IA was inserted to remove the doubts. The appellant submits that the insertion of explanation proves that there was lack of clarity on the admissibility of the deduction under section 80-IA(4) by the contractor and which was clarified subsequently with retrospective effect. The appellant submits that it was under bonafide belief and on reading of the section as on the date of filing of return of income it claimed deduction under section 80-IA. The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. During the course of assessment proceedings, the Assessing Officer has observed that the assessee was a sub-contractor for projects of road construction and hence not eligible for deduction u/s. 80- IA as per Explanation inserted by the finance Act, 2007 with retrospective effect from 01.04.2007. Subsequently, the assessee filed revised computation withdrawing the claim of deduction u/s. 80-IA. The Assessing Officer has disallowed the claim of deduction u/s. 80-IA amounting to ₹ 8,40,30,860/- and initiated penalty proceedings u/s. 271(1)(c) for furnishing retrospective effect from 01.04.2007. Subsequently, the assessee filed revised computation withdrawing the claim of deduction u/s. 80- IA. The Assessing Officer has disallowed the claim of deduction u/s. 80-IA amounting to ₹ 8,40,30,860/- and initiated penalty proceedings u/s. 271(1)(c) for furnishing inaccurate particulars of income. The assessee did not prefer any appeal against the order u/s. 143(3) dated 22.12.2008. During the course penalty proceedings u/s. 271 (1)(c), the assessee had neither attended nor furnished any written submission in response to the show cause notice / final opportunity date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the assessee has filed its return of income, which was correct as per law on the date of filing of the return, the cash compensatory support also came within the sway of section 28. When additional tax has the imprint of penalty the Revenue cannot say that levy of additional tax is automatic under section 143{1A) of the Act. If additional tax could be levied in such circumstances it will be punishing the assessee for no fault of his. That cannot ever be the legislative intent. In the circumstances of the present case, levy of additional tax taking into account the income by way of cash compensatory support was not warranted. Decision of the Madhya Pradesh High Court in CIT v. Hindustan Electro Graphite Ltd. [1998] 299 ITR 16 affirmed. 2.4 After considering the remand report of the AO, the submissions of the assessee and judgments relied upon by both the sides, the Ld. CIT(A) deleted the penalty. It is observed by us that detailed findings have been given by the Ld. CIT(A) while deleting the penalty, and these are in accordance with law, as was applicable on the facts of this case. It is noted by us, in view of the facts of this case, that the assessee had filed its ret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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