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TMI Blog2019 (6) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.8.2016. 2. The assessee has raised the following grounds of appeal: "1. In the facts and circumstances of the case and in law, the Assessing Officer erred in levying penalty u/s.271(1)(c) on the basis of notice/s.274 r.w.s. 271(1)(c) wherein no specific mentioned of either filing of inaccurate particulars or concealment of income was mentioned and thereby passing the order of penalty which is to be quashed as per recent judgment of Bombay High Court and Supreme Court. Without prejudice to the above and alternatively: 2. In the facts and circumstances of the case and in law, the CIT(A) erred in confirming the penalty u/s.271(1)(c) amounting to Rs. 52,38,479/- on account of deduction u/s.80IB (10) of the Income tax Act which accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 31.8.2016 holding the assessee guilty of default u/s.271(1)(c) of the Act qua the wrong claim of deduction u/s.80IB(10) of the Act. The Assessing Officer levied penalty equivalent to 100% of tax sought to be evaded on the amount of deduction claimed u/s.80IB(10) of the Act. This levy of penalty u/s.271(1)(c) of the Act has since been upheld by the CIT(A) against which the assessee is in appeal before us. 5. Before us, the first and foremost grievance putforth by the assessee is that apart from the fact that the claim of deduction has been denied and the same is not disputed by the assessee in the quantum proceedings, nothing more has been shown to the effect that there was any concealment of income or furnishing of inaccurate parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, there was no intention to suppress payment of tax inasmuch as in the return of income filed, the assessee has paid the tax of Rs. 36 lakhs in terms of Minimum Alternative Tax (MAT) on the book profits. Consequent to the disallowance of deduction claimed u/s.80IB(10) of the Act, the additional tax liability was only to the extent of Rs. 15 lakhs which the assessee duly paid alongwith interest. The Representative of the assessee pointed out that if the claim of deduction was not made in the return, the tax liability would have arisen under the normal provisions of the Act, which would have required payment of Rs. 15 lakhs additionally, which the assessee would have paid and that to say that the claim of deduction was made with a view to su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs and the penalty proceedings are separate and independent proceedings. It has been held by Hon'ble Supreme Court in the case of Anantharam Veerasinghaiah & Co. vs. CIT, (1980) 123 ITR 0457 (SC) that the findings in the quantum assessment proceedings are not conclusive to determine the levy of penalty u/s.271(1)(c) of the Act though such findings may be relevant. In other words, the fact that a particular amount has been determined as income in the quantum assessment proceedings, cannot ipso facto, be conclusive for imposing penalty u/s.271(1)(c) of the Act. The Hon'ble Supreme Court in the case of of CIT vs. Reliance Petroproducts Ltd, 322 ITR 158(SC) held that even if a claim made in the return of income is found to be untenable, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the assessee in the return of income was on bonafide consideration or not. Ostensibly, there is a mistake in making the claim inasmuch as the approval is not before the stipulated date i.e. 31.3.2008. However, the mistake which has resulted into the denial of deduction by itself cannot be construed as a fit case for levy of penalty under section 271(1)(c) of the Act. It has been explained before us that though the project of the assessee is continuing from the earlier period, yet this was the first year of claim under section 80IB(10) of the Act since the sales were made in this year and the profits were arrived at. Secondly, reference was also made to a report issued by the auditor of the assessee regarding claim of deduction unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oproducts (supra) clearly support the stand of the assessee that penalty under section 271(1)(c) is not merited. 9. At the time of hearing, the ld. Representative for the assessee also relied upon the judgment of Hon'ble Bombay High Court in the case of CIT vs. Petels Engineers Limited, 42 taxmann.com 433 (Bom), wherein, in a somewhat similar situation, penalty has been found to be not exigible. In the case before the Hon'ble High Court, the assessee had claimed deduction under section 80IA of the Act. It was found that the assessee had shifted its unit from one place to another and that 80% of the cost of plant and machinery on the new factory was by way of acquiring new plant and machinery and only less than 20% of cost was towards trans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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