TMI Blog2008 (8) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... Krishna CORAM:- HON'BLE MR JUSTICE BADAR DURREZ AHMED HON'BLE MR JUSTICE RAJIV SHAKDHER BADAR DURREZ AHMED, J (ORAL) 1. This appeal, filed on behalf of the revenue, pertains to the assessment year 2001-02. It is directed against the order passed by the Income-tax Appellate Tribunal on 09.02.2007. 2. For the assessment year under consideration, the assessee filed a return declaring an income of Rs 41,30,950/- and claimed 100% deduction under Section 80 HHE of the Income-tax Act, 1961 (hereinafter referred to as 'the said Act') in respect of the profits from rendering software services. It is an admitted position that for this assessment year, i.e., 2001-02, the assessee could have claimed only 80% deduction. The entire i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a penalty of Rs 7,12,526/- 6. The assessee took the matter in appeal before the Commissioner of Income-tax (Appeals), who, after a detailed consideration of the explanation offered by the assessee and the circumstances under which the assessee had made the claim of 100% deduction, came to the conclusion that the excess deduction had been inadvertently claimed by the assessee due to the mistake of the assessee's consultant and ignorance of the law in force. The Commissioner of Income-tax (Appeals) returned a definite finding that it is not a question of excess deduction having been claimed mala fidely, on the other hand, it is a case where the appellant has shown reasonable cause to have made such a claim. It was also found that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no reason to interfere with the tribunal's decision. As observed in Dilip N. Shroff v. Joint Commissioner of Income-tax and Another: 291 ITR 519(SC), before penalty can be levied under Section 271(1)(c), the Assessing Officer, in view of the provisions of clause (B) of Explanation 1, must return a finding that the assessee failed to prove that the explanation offered by him is not only not bona fide, but all the facts relating to the same and material to the income were not disclosed by him. The Supreme Court observed that apart from the assessee's explanation being not bona fide, the Assessing Officer should also return a finding of fact that the assessee had not disclosed all the facts which were material to the computation of his income. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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