TMI Blog2014 (7) TMI 1180X X X X Extracts X X X X X X X X Extracts X X X X ..... ER Appellant by : Shri Manjit Singh, DR Respondent by : Shri Ashwani Kumar ORDER PER SUSHMA CHOWLA, JM The appeal filed by the revenue is directed against the order of the Commissioner of Income Tax (Appeals)-I, Ludhiana dated 06.02.2014 against the penalty order passed under section 271(1)(c) of the Income Tax Act, 1961 (in short 'the Act'). 2. The revenue has raised the following ground of appeal : Whether on the facts and circumstances of the case and in law, the ld. Commissioner of Income Tax(A) erred in deleting the penalty amounting to ₹ 4,14,45,686/- levied by the Assessing Officer under section 271(1)(c) of the Income Tax Act,1961 for furnishing inaccurate particulars of income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest free advances made by the assessee. 7. The revenue is in appeal against the order of Commissioner of Income Tax (Appeals). 8. We have heard the rival contentions and perused the record. The issue of levy of penalty under section 271(1)(c) of the Act on the treatment of sales tax subsidy as revenue receipt arose before the Tribunal in assessee's own case relating to assessment year 2004-05. The Tribunal in consolidated order passed in ITA No. 1445/Chd/2010 in appeal filed by the assessee and ITA No. 290/Chd/2011 in the appeal filed by the revenue, vide order dated 06.03.2014 deleted the penalty levied under section 271(1)(c) of the Act on the said issue of sales tax subsidy observing as under : 43. The next item of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... UF) 300 ITR 354 (P H) had held that where the issue is highly debatable in as much as two views were possible on the said issue and where the claim of the assessee on the issue was based on one possible view, the making of such bonafide claim on the basis of a possible view could not be treated as concealment of its income by the assessee or furnishing of inaccurate particulars of income so as to attract the penal provisions of section 271 (1)(c) of the Income Tax Act. 45. Further similar issue of levy of penalty under section 271(1)(c) of the Act arose before the Chandigarh Bench of Tribunal in the case of DCIT Vs. M/s Bhushan Power Steel Ltd. (supra) and the Tribunal vide order dated 25.9.2013 on similar issue of levy of penalty unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant findings of the Hon'ble Punjab Haryana High Court in CIT Vs. M/s Gurdaspur Cooperative Sugar Mills (supra) are as under: 3. We find that the reliance on the abovesaid judgment is not tenable, as in the aforesaid case, the deductions under section 80-O of the Act was declined for the reason that the assessee has not produced any details of the expenses allegedly incurred by it. The Delhi High Court observed (page 170): The assessee, for claiming deduction under section 80-O of the Act, wanted the same at 50 per cent of the gross income received in convertible foreign exchange in India provided by it to its foreign clients. The Assessing Officer, however, was of the view that on correct interpretation under section 80-O, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oducts Pvt. Ltd (supra) have laid down the proposition that A mere making of the claim, which is not sustainable in law, by itself will not amount to furnishing inaccurate particulars regarding the income of the assessee . 22. In the totality of the above said facts and following the ratio laid down by the Hon'ble Supreme Court in CIT, Ahemdabad Vs. Reliance Petroproducts Pvt. Ltd (supra) and the Hon'ble Punjab Haryana High Court in CIT Vs. M/s Gurdaspur Cooperative Sugar Mills (supra) and CIT Vs. Tek Ram (HUF) (supra) we hold that in view of the debatable issue raised, the assessee is not exigible to levy of penalty u/s 271 (1) (c) of the Act in the facts of the present case where the claim of the assessee that the receipts w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which has been admitted and question of law has been framed on this account. Following the parity of reasoning in respect of the treatment to sales tax subsidy and the question of law pending adjudication before the Hon'ble Supreme Court of India, we confirm the order of the CIT (Appeals) in holding that in view of the debatable issue raised the assessee cannot be held to have furnished inaccurate particulars of income and hence not exigible to levy of penalty under section 271(1)(c) of the Act. 10. The facts and circumstances of the present case are identical to the facts and circumstances arising in the appeal relating to assessment year 2004-05 and following the same parity of reasoning, we hold that the assessee is not exigible ..... X X X X Extracts X X X X X X X X Extracts X X X X
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