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Oxford Softech P. Ltd. Versus ITO, Ward 13 (1) , New Delhi

Penalty u/s 271(1)(c ) - entitlement for relief u/s 80 IA - Held that:- The assessee has made a claim u/s 80 IA of the Act. Along with the return of income the assessee filed report from a Chartered Accountant in form no.10 CCB as required u/s 80 IA(7) of the Act. The claim was made on the advice of the auditors. A perusal of this audit report demonstrates that the auditors of the assessee also believed that the assessee was eligible for deduction u/s 80 IA of the Act. It was a conscious claim m .....

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guidance and advice of a Chartered Accountant. Hence in our view it was under a bonafide belief that it is entitled to the claim for deduction under provisions of s.80 IA of the Act.

The provisions under the Income Tax Act are highly complicated and its different for a layman to understand the same. Even seasoned tax professionals have difficulty in comprehending these provisions. Making a claim for deduction under the provisions of S.80 IA of the Act which has numerous conditions att .....

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apoor, Adv. For the Respondent : Sh. P.Damkanunjna, Sr.D.R. ORDER Per J. Sudhakar Reddy, Accountant Member This is an appeal filed by the Assessee directed against the order of Ld.CIT(A)-XVI, New Delhi dated 29.7.2011 pertaining to the A.Y. 2004-05, wherein a penalty levied by the Assessing Officer (AO) u/s 271(1)(c ) of the Income Tax Act, 1961 (the Act) was confirmed by the First Appellate Authority. 2. Facts in brief:- The assessee is a company and is engaged in providing certain services inc .....

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d maintaining, infrastructure facility. The A.O. records that the assessee company had enclosed copy of agreements of Service Agreement, Hire Agreement for interiors and Hire Agreement for air conditioning and power, between assessee company and its clients namely M/s Global Vantedge Pvt. Ltd. and M/s Ephinay India Pvt.Ltd. The A.O. disallowed the claim for deduction u/s 80 IA. He relied that (a) the assessee is merely providing certain interiors, furniture, fixtures and generator back up power .....

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audit report. (d) The assessee could not submit the specific provision of Sec.80 IA under which it was claiming deduction. (e) Reliance placed by the assessee on certain case laws and approvals of Dy.Director/Director of Software Technology Park of India for claiming deduction u/s 80 IA, which is extracted in the assessment order is not warranted for the reason that, the guarantee card etc. are issued to the assessee company for approval of 100% software export unit status under Software Techno .....

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Counsel and he was advised to withdraw the appeal. 2.3. The A.O. thereafter levied penalty u/s 271(1)(c ) of the Act on the ground that the assessee has furnished inaccurate particulars of income. On appeal the First Appellate Authority confirmed the same. Further aggrieved the assessee is before us on the following grounds. 1. That the authority below has erred on facts and in law in upholding penalty u/s 271(1)(c ) of the Act amounting to ₹ 13,20,460/-. 2. That the authority below has ar .....

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e submitted that all the particulars with respect to the claim along with an auditor s report were furnished along with the return of income and hence there was no concealment. He pointed out that the claim was supported by a report of the tax auditor u/s 80 I(7) in form no.10CCB r.w.Rule 18BBB and submitted that the professional advise resulted in the assessee making the claim. He further relied on the Certifications from STPI to demonstrate the bonafide of the assessee. He relied on the follow .....

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has been made by the assessee and hence it is a case of furnishing of inaccurate particulars of income. He argued that the claim of deduction u/s 80 IA is not allowable and the assessee has made deliberate attempt to reduce its taxable income and hence it is not a bonafide mistake. He referred to auditor s report in form 10CCB and submitted that nowhere in the audit report the sub section under which the claim was made has been given. Similarly he submitted that the STPI authorities have registe .....

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report from a Chartered Accountant in form no.10 CCB as required u/s 80 IA(7) of the Act. The claim was made on the advice of the auditors. A perusal of this audit report demonstrates that the auditors of the assessee also believed that the assessee was eligible for deduction u/s 80 IA of the Act. It was a conscious claim made by the assessee supported by an audit report. The assessee has also made an application to STPI for setting up the infrastructure facilities under the STPI Scheme. All de .....

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the Act. 6.1. The provisions under the Income Tax Act are highly complicated and its different for a layman to understand the same. Even seasoned tax professionals have difficulty in comprehending these provisions. Making a claim for deduction under the provisions of S.80 IA of the Act which has numerous conditions attached, is a complicated affair. It is another matter that the assessing authorities have found that the claim is not admissible. Under these circumstances we hold that it cannot be .....

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