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The Pr. Commissioner of Income Tax 3, Ludhiana Versus M/s S.S. Food Industries

2016 (2) TMI 517 - PUNJAB AND HARYANA HIGH COURT

Penalty u/s 271(1)(c) - deduction under Section 80IC disallowed - Held that:- Admittedly, the assessee had filed return of income declaring nil income on 30.9.2009 after claiming deduction under Section 80IC. At the time of making return, the issue was debatable and penalty could not have been levied. Further, the Tribunal noticed that the assessee had disclosed all the particulars of the income and had not concealed anything. Once proper disclosure had been made, penalty was not attracted in vi .....

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pondent : Mr. B.M.Monga, Advocate and Mr. Rohit Kaura, Advocate Ajay Kumar Mittal,J. 1. This appeal has been filed by the appellant-revenue under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 23.12.2014, Annexure-4 passed by the Income Tax Appellate Tribunal, Chandigarh Bench, 'B', Chandigarh (in short, the Tribunal ) in ITA No.925/CHD/2013 for the assessment year 2009-10, claiming following substantial questions of law:- i) Whether on the facts an .....

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w in giving a finding that the assessee can claim deduction till the decision of Hon'ble Supreme Court even though there is a decision of jurisdictional High Court in favour of the revenue? iii) Whether on the facts and in the circumstances of the case, the ITAT has not appreciated the Full Bench decision of Hon'ble Punjab and Haryana High Court in the case of Smt. Aruna Luthra 252 ITR 76 wherein it was held that non following of jurisdictional High Court decision amounts to mistake appa .....

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AT is right in law in not considering detailed findings given by CIT(A) in his order dated 1.8.2013 in paras 3.14 to 3.26? 2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The respondent assessee is a firm which is engaged in the business of manufacturing of biscuits/cookies and other bakery products. It filed its return of income on 30.9.2009 at total income of Rs. nil for the assessment year 2009-10. The case was selected for scruti .....

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ggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 1.8.2013, Annexure 3, the CIT (A) dismissed the appeal. Not satisfied with the order, the assessee filed appeal before the Tribunal. Vide order dated 23.12.2014, Annexure 4, the Tribunal allowed the appeal and set aside the order passed by the CIT(A) by deleting the penalty. Hence the instant appeal by the revenue. 3. We have heard learned counsel for the parties. 4. Admitt .....

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India's case (supra) and the filing of the return by the assessee. At the time of making return, the issue was debatable and penalty could not have been levied. Further, the Tribunal noticed that the assessee had disclosed all the particulars of the income and had not concealed anything. Once proper disclosure had been made, penalty was not attracted in view of the judgment of the Apex Court in CIT vs. Reliance Petroproducts Pvt. Limited, (2010) 322 ITR 158. Further the return which was file .....

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ble Punjab and Haryana in case of Liberty India vs. CIT on 17.8.2006. At the same time the decision of Hon'ble Delhi High Court in case of CIT vs. Eltek SGS (P) Limited, 300 ITR 6 was rendered on 19.2.2008 which was favourable to the assessee, therefore, assessee had the right to make claim of deduction. It is not always necessary that everybody would become aware of the decision. Ultimately when the same issue was decided by the Hon'ble Supreme Court on 31.8.2009 which is said to be pub .....

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ticulars. Once proper disclosures have been made then penalty is not attracted in view of the decision of Hon'ble Supreme Court in case of CIT vs. Reliance Petroproducts Pvt. Limed 322 ITR 158. Further the return was filed on the basis of certificate issued by Chartered Accountant and even if it is a mistake on the part of Chartered Accountant, the assessee can always take the shelter that he was under bonafide belief on the basis of such advice that deduction was claimed on the basis of suc .....

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- 7. As against this, Learned Counsel appearing on behalf of the respondent pointed out that the language of Section 271(1)(c) had to be strictly construed, this being a taxing statute and more particularly the one providing for penalty. It was pointed out that unless the wording directly covered the assessee and the fact situation herein, there could not be any penalty under the Act. It was pointed out that there was no concealment or any inaccurate particulars regarding the income were submitt .....

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t have furnished inaccurate particulars of his income. Present is not the case of concealment of the income. That is not the case of the Revenue either. However, the Learned Counsel for Revenue suggested that by making incorrect claim for the expenditure on interest, the assessee has furnished inaccurate particulars of the income. As per Law Lexicon, the meaning of the word "particular" is a detail or details (in plural sense); the details of a claim, or the separate items of an accoun .....

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;submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income". We do not think that such can be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate parti .....

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