TMI Blog2007 (6) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... e following substantial question of law:- "Whether in the facts and circumstances of the case, the Tribunal was right in deleting the penalty under section 271(1)(c) when the assessee had returned the interest under business income for the purpose of claiming deduction under section 80HHC and 80I?" 2. The facts leading to the above substantial question of law are as under: 3. The assessee is a company incorporated under the Companies Act. The assessee-company is engaged in the manufacture and sale of pharmaceutical products. The relevant assessment year is 1995-96 and the corresponding accounting year ended on 31.03.1995. The assessee-company filed its Return of income on 28.11.1995 declaring a total income of Rs.2,57,270/- aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggrieved, the Revenue filed an appeal to the Income-tax Appellate Tribunal ("Tribunal" in short). The Tribunal dismissed the Revenue's appeal and confirmed the order of the C.I.T.(A). Hence the present tax case by the Revenue. 4. Learned Standing Counsel appearing for the Revenue submitted that the assessee had furnished inaccurate particulars of income and it had lead to undue claim of deduction under Sections 80HHC and 80I of the Act. It is also submitted that the assessee-company had received a total interest income of Rs.1,20,56,800/-. Further it is contended that the assessee had not returned the entire interest income and also claimed wrongly the deductions under Sections 80HHC and 80I of the Act. It is also further submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aled its income. 8. Similarly the claim for deduction u/s.80HHC and sec.80I cannot be equated with furnishing of inaccurate particulars of its income by the appellant Company. In fact the appellant Company has relied on the judgment of Bombay High Court in CIT vs Nagpur Engineering Co. Ltd. (245 ITR 806) wherein it has been held that the bank interests are eligible for deduction u/s.804. It has also placed reliance on the case of CIT vs Punit Chemicals Ltd. (245 ITR 550 (Bom) and Pondicherry Distilleries Ltd Vs ITO (8 ITD 39)(Mad) where the similar principles were applied to the facts of these cases. The fact that the appellant Company was not allowed deduction u/s.80HHC and 80I does not ipso facto lead to a conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Dilip N.Shroff Vs. Joint Commissioner of Income - tax and Another , [2007] 291 ITR 519 (SC), the Supreme Court considered the scope of levying of penalty under Section 271(1)(c) of the Act and held as follows:- "The legal history of section 271(1)(c) of the Act traced from the 1922 Act prima facie shows that the Explanations were applicable to both the parts. However, each case must be considered on its own facts. The role of the Explanation having regard to the principle of statutory interpretation must be borne in mind before interpreting the aforementioned provisions. Clause (c) of sub-section (1) of section 271 categorically states that the penalty would be leviable if the assessee conceals the particulars of his income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een found as of fact that he has not disclosed all the facts which was material to the computation of his income." "...."Concealment of income" and "furnishing of inaccurate particulars" are different. Both concealment and furnishing inaccurate particulars refer to deliberate act on the part of the assessee. A mere omission or negligence would not constitute a deliberate act of suppressio veri or suggestio falsi. Although it may not be very accurate or apt but suppressio veri would amount to concealment, suggestio falsi would amount to furnishing of inaccurate particulars." 7. In the present case, the Tribunal followed the above principles and held that it is not a fit case for levying penalty. The concurrent findings ..... X X X X Extracts X X X X X X X X Extracts X X X X
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