TMI Blog2015 (10) TMI 2752X X X X Extracts X X X X X X X X Extracts X X X X ..... 5% as per opinion of the Assessing Officer under section 80IC of the Act would not be at par with concealment of income or furnishing inaccurate particulars of income. It is not a fit case of levy of penalty under section 271(1)(c) of the Act because it is well settled that levy of penalty is not automatic in each and every case as it depends upon facts and circumstances of the case. Since the assessee’s claim of deduction under section 80IC have been allowed in earlier years @ 100% and admittedly assessee undertook substantial expansion in assessment year under appeal, therefore, assessee made bonafide claim of deduction under section 80IC of the Act and there were no judicial pronouncements against the assessee on the date of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -05. The Assessee firm undertook substantial expansion during A.Y. 2009-10 under appeal and started claiming deduction u/s 80IC @ 100%, treating A.Y. 2009-10 to be initial year. The deduction u/s 80IC claimed @100% was reduced to 25% of the total profit declared being the 6th year of manufacturing activities of the Industrial undertaking. The Assessing Officer initiated penalty proceedings for furnishing inaccurate particulars of income. The appeal filed by the assessee on quantum was dismissed. The Assessing Officer, therefore, vide separate order levied the penalty under section 271(1)(c) of the Act for furnishing inaccurate particulars of income. 3. The penalty order was challenged before ld. CIT(Appeals) and ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 991/2013 dated 29.01.2014 allowed the similar claim of assessee. Therefore, the issue is highly debatable and dependant upon the interpretation of provisions of Section 80IC of the Act. He has submitted that it is also not in dispute that assessee was entitled for deduction under section 80IC. The issue was of whether 100% deduction or 25%, therefore, assessee has not made any wrong claim deliberately and claim of assessee was not false. The assessee made bonafide claim of deduction under section 80IC. Therefore, it is not a case of furnishing inaccurate particulars of income. Making an incorrect claim was not tantamount to furnishing of inaccurate particulars of income. He has also relied upon decision of the Supreme Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-10 being initial year, assessee would be entitled for deduction under section 80IC of the Act @ 100%. However, the authorities below considered that the assessment year under appeal i.e. 2009-10 is the 6th year of the manufacturing activity of the Industrial Undertaking, therefore, instead of claim of 100% deduction under section 80IC, assessee would be entitled for deduction under section 80IC @ 25% only. The claim of assessee was supported by Audit Report and the past history submitted by assessee and considered by the authorities below. Thus, the claim of assessee was raised for the first time in the 6th year on undertaking substantial expansion and it was claimed to be first year/initial year for claiming 100% deduction under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0IC in assessment year under appeal in a bonafide manner and mere fact that claim of assessee has been disallowed, would not prove it to be a fit case of levy of penalty for filing inaccurate particulars of income. The issue of claim of deduction was debatable and bonafide. However, there was conflict for determination of provision of law. Merely making a claim of 100% deduction against 25% as per opinion of the Assessing Officer under section 80IC of the Act would not be at par with concealment of income or furnishing inaccurate particulars of income. The decisions relied upon by ld. counsel for the assessee support the contention of ld. counsel for the assessee that it is not a fit case of levy of penalty under section 271(1)(c) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c). A mere making of a claim which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. 8. Considering the above discussion, we are of the view that it is not a fit case of levy of penalty under section 271(1)(c) of the Act because it is well settled that levy of penalty is not automatic in each and every case as it depends upon facts and circumstances of the case. Since the assessee s claim of deduction under section 80IC have been allowed in earlier years @ 100% and admittedly assessee undertook substantial expansion in assessment year under appeal, therefore, assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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