TMI Blog2013 (3) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act at an income of ₹ 66,44,520/- vide order dated 10.12.2008. As against return declared an income of ₹ 3,54,260/-, which was filed by the assessee on 09.01.2007. During the assessment proceedings, Assessing Officer noticed that the assessee has claimed deduction of ₹ 58,90,260/- under Section 80IB of the Act. The assessee filed the return of income on 09.01.2007 against the due date of 31.10.2006. To claim deduction under Section 80IB of the Act, the assessee was required to file his return of income on or before the due date specified under Section 139(1) of the Act as per the requirement of Section 80AC of the Act. During the assessment proceedings, the assessee could not lead any documentary evidence to justify the delay in filing the return beyond the due date. As the assessee failed to comply with the statutory provision of Section 80AC of the Act, deduction of ₹ 58,90,160/- under Section 80IB of the Act was not allowed to the assessee and the same was added to the income returned by the assessee. The Assessing Officer initiated the penalty proceeding against the assessee for furnishing inaccurate particulars of income while completing the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of Reliance Petro Products Ltd. reported at 322 ITR 158. In this regard, it is submitted that the learned CIT(A) has not properly appreciated that the assessee making a claim on account of deduction u/s 80IB of the I.T. Act amounted to furnish inaccurate particulars of income. Inaccurate particulars of income would take within its sweep all the particulars which are both factually and legally incorrect. As per the provisions of section 80AC of the I.T. Act, the assessee was not entitled to deduction u/s 80IB of the I.T. Act if the return of income was not within the stipulated time as prescribed under Section 139(1) of the I.T. Act. So when the assessee had filed the return on 26.11.2007 for the assessment year 2007-08 and on 09.01.2007 for the assessment year 2006- 07, it was clear to the assessee that it is not entitled to claim deduction and if the assessee still made a claim of deduction u/s 80IB of the I.T. Act that clearly amounted to furnishing of inaccurate particulars of income and as such it was a fit case for the levy of penalty under Section 271(1)(C ) of the I.T. Act. The learned CIT(A) failed to appreciated this subtle nuance of law and as such err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same was filed on 09.01.2007, when complete information for filing the return was available. Assessing Officer rejected the claim of assessee under Section 80IB of the Act for the assessment year in dispute only on the ground that Income Tax Return of the assessee was not filed within the due date as required by Section 80AC of the Act. He further submitted that the Assessing Officer has not correctly interpreted the provision of Section 80C read with Section 139(1) of the Act which provides that all assesses claiming deduction under Chapter VI-A must file their return of income meaning thereby deduction not to be allowed unless return furnished. 10) Learned counsel for the assessee also argued that assessee had fulfilled the objects, intent and purpose for which the provision of Section 80C of the Act was introduced. However, there is a technical failure on the part of the assessee. This is a case of extreme genuine hardship to the assessee where deduction under Section 80IB of the Act has been reduced for a technical failure. Assessee has claimed the deduction under Section 80IB of the Act on the advice of his legal advisor that is bona fide, therefore the penalty in disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details supplied in the return are not accurate, not exact or correct, not according to truth. In the absence of a finding by the AO that any details supplied by the appellant in its return were found to be incorrect or erroneous or false, there would be no question of inviting penalty u/s 271(1)(C). The AO has to be satisfied that the appellant has concealed income or that the appellant has furnished inaccurate particulars of income or that the case of appellant is covered by the deeming fiction of one of the explanations appended to 271(1)(c). It has to be ascertained whether the explanation offered by the appellant in support of its claim was bona fide or not; whether the appellant has failed to furnish all relevant particulars and material for a claim made in the return or all the basic and primary facts relating to a claim were duly and fully placed before the AO or the appellant has discharged the burden that lay on it under explanation 1 to section 271(1)(c). Therefore, it is obvious that it must be shown that the conditions under Section 271(1)(c) must exist before the penalty is imposed. There can be no dispute that everything would depend upon the return filed becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajasthan), accepted tribunal s finding deleting the penalty holding where an arguable, controversial or debatable deduction is claimed, the claim could not be said to be false, otherwise it would become impossible for any appellant to raise any claims or deductions which might be debatable, and it was not the intention of the legislature to make punishable such claims, if they were not accepted . The High Court affirmed the decision of I.T.A.T. and held that no penalty was leviable. The Rajasthan High Court in the case of Chanderpal Bagga Vs. I.T.A.T. reported at 261 ITR 67, held that if the appellant claimed any exemption after disclosing relevant basic facts and under ignorance of the provisions of the Act had not offered amount of tax,Penalty should not be imposed. In such cases, it is the duty of the Assessing Officer to ask for further details and tax the income if it is liable to tax. There was no concealment of income and penalty could not be imposed. Again the Madhya Pradesh High Court in the case of CIT Vs. Rajiv Udyog 227 ITR 209 (MP) held that where the assessee claimed the deduction under chapter VIA and the same was disallowed by the Assessing Officer, it cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction under Section 80IB of the Act to the assessee for the assessment years 2004-05 and 2005-06 but he has refused the same for the assessment year 2006-07 due to the reason that the assessee has filed belated return beyond the prescribed time laid down under Section 139(1) of the Act i.e. on 09.01.2007 as against the due date of 31.10.2006 read with the provision of Section 80AC of the Act. As the assessee failed to comply with the statutory provision of Section 80AC of the Act, deduction of ₹ 58,90,160/- for the assessment year 2006-07 and ₹ 30,74,852/- for the assessment year 2007-08 under Section 80IB of the Act was not allowed to the assessee and the same was added to the income returned by the assessee. Assessing Officer has also initiated the penalty proceedings under Section 271(1)(c) of the Act against the assessee which is in dispute in the present appeals. It is also admitted fact that against the additions made by the Assessing Officer on the disallowance of deduction under Section 80IB of the Act, assessee has lost his appeals upto the I.T.A.T., Amritsar Bench. But in the penalty proceeding, assessee stated that the accounts of new Industrial Undertaki ..... X X X X Extracts X X X X X X X X Extracts X X X X
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