TMI Blog2010 (1) TMI 1208X X X X Extracts X X X X X X X X Extracts X X X X ..... estricted to 25% of the balance amount of the profit as reduced by deduction u/s.80-HHC of the I.T. Act, 1961. The assessee challenged the order of the Assessing Officer before the Learned CIT(Appeals), who directed the Assessing Officer to allow deduction u/s.80-IA of the I.T. Act, 1961 on the gross total income. The Department preferred appeal before the Tribunal and it was contended on behalf of the Department that the issue stands covered in favour of the Revenue and against the assessee by the decision of ITAT Chennai Bench (Special Bench) in the case of ACIT vs. Rogini Garments (2007) 108 ITD 49 (Chennai)[SB], wherein the Tribunal while considering deduction u/s.80-IA and deduction u/s.80-HHC of the I.T. Act, 1961 has held that, in view of the restriction placed on claim of repetitive reduction in section 80-IA(9) of the I.T. Act, 1961 which is made applicable in respect of all deductions under Chapter VI-A, relief u/s.80-IA of the I.T. Act, 1961 should be deducted from the profits and gains of the assessee s business before computing relief u/s.80-HHC of the I.T. Act, 1961. Following this order, the Tribunal vide order dated 31/01/2008 had directed to first allow the deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 27.04.2007. (3) It is respectfully submitted that at the time of filing of returns for the above assessment years there were a number of judgments in favour of the assessee including Income-tax Appellate Tribunal, Ahmedabad Bench in the case of M/s. Atul Intermediates and other Tribunals of Sang/ore and Jaipur Bench which supports the cases of the assessee. Copies of said orders are placed at pages 8 to 49 of the Paper Book. Moreover, the deductions were claimed in the statement of income itself and also supported by Auditor's Certificate and Reports attached with the returns as is evident from the statements of income placed at pages 1 to 7 of the Paper Book. Further, the Income-tax Appellate Tribunal, Ahmedabad Bench in assessee's own case for the AY 2000-01 has quashed the order under section 263 of the Act which was sought to be revised for similar claims made by the assessee (pages 50 to 58 of Paper Book). Hence, it is humbly submitted that all the facts relating to the said deductions were already fully disclosed by the assessee and also fully supported by the case law in favour of the assessee at the relevant point of time and hence the deductions were clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ACIT vs Rogini Garments reported at (2007) 108 ITD 49 , wherein the Tribunal while considering the deduction u/s. 80IA and deduction u/s. 80HHC has held that in view of restriction placed on claim of repetitive deduction in section 80IA(9), which is made applicable in respect of all deductions under Chapter VIA, relief u/s.80IA of the Act should be deducted from the profits and gains of assessee's business before computing the relief u/s. 80HHC of the Act. The Tribunal has held that deduction cannot be allowed ignoring the restrictive clause contained in section 80IA (9) of the Act. Therefore, the restrictive clause in Section 801A makes it clear that wherever deduction under any other section of chapter VI-A(C) is claimed, the computation will be subject to the restrictions laid down in section 80lA(9) of the Act. The provisions contained in section 80IA(9) are very specific and clear so far as restriction on allowability of deduction is concerned. The reading of the provisions reveals well that by no stretch of imagination, claim of excess deduction is justified. In view of clear provisions as per directions given by the Hon'ble ITAT, the excess deduction claimed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of deduction u/s.80-IB or 80-HHC of the I.T. Act, 1961. The ld. counsel for the assessee submitted that since the decision of the Special Bench in the case of Rogini Garments(supra), was delivered later on after filing of the return of the assessee, therefore, difference of opinion arrived at the later stage of the penalty proceedings, penalty would not be justifiable in the matter. He has further submitted that even the case of Rogini Garments(supra) was re-considered by larger Special Bench of the ITAT Delhi Bench in the case of ACIT vs. Hindustan Mint Agro Products vide order dated 23/06/2009 reported in 315 /(AT) page 401 (Delhi). The ld. counsel for the assessee, therefore, submitted that these are not fit cases for levy of penalty u/s.271(1)(c) of the I.T. Act, 1961. 6. On the other hand, Learned Departmental Representative relied upon the orders of the authorities below and submitted that assessee has made excess claim of deduction u/s.80-IB of the I.T. Act, 1961 in the return of income which is ultimately rejected by the Tribunal by allowing the Departmental appeal, therefore, authorities below were justified in levying the penalty u/s.271(1)(c) of the I.T. Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table, and it was not the intention of the Legislature to make punishable-such claims, if they were not accepted; (ii) the total income according to the original and revised computations of the assessee remained the same, viz., ₹ 13,07,646 and the income as computed on final assessment was ₹ 6,86,519; (iii) no further tax was payable and since the assessee had paid tax amounting to ₹ 6,90,000 a refund became payable to it as a result of the final assessment; (iv) as against deduction of ₹ 6,73,298 claimed by the assessee the total deduction allowed in the final assessment was more, viz., ₹ 10,17,306; and, therefore, the assessee could be said to have discharged its burden under the Explanation to section 271(l)(c). On a reference: Held, affirming the decision of the Appellate Tribunal, that no penalty was leviable in view of the finding of the Tribunal that when the assessee had claimed deduction of an amount that was debatable it could not be said that the assessee had concealed any income or furnished inaccurate particulars for evasion of tax, and, in view of the findings of the Tribunal, no case was made out for interference. 8.1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n two views are possible and when no clear and definite inference can be drawn in a penalty proceedings, penalty cannot be imposed. 10. Hon'ble Supreme Court in the case of CIT vs. Munim reported in 313/(Statute) 30 (SC) confirmed the view of the High Court in which it was held that when assessee does not include particular item in the turnover under bona fide belief that he is not liable to do so, it would not be right to treat the return as a false return inviting the imposition of penalty. 11. Hon'ble Supreme Court in the recent decision in the case of M/s.Rajasthan Spinning and Weaving Mills 2009-TIOL-63 held that on every demand penalty is not automatic. The Explanation-1 to section 271(1)(c) of the I.T. Act, 1961 provides for deemed concealment of income if the assessee fails to offer an explanation or assessee fails to prove that such explanation is bona fide. However, considering the facts and circumstances of the case, it is clear that the assessee disclosed all the relevant facts in the return(s) of income and made a claim of deduction u/s.80-IB of the I.T. Act, 1961 on the gross total income on the basis of several decisions in favour of the assessee delive ..... X X X X Extracts X X X X X X X X Extracts X X X X
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