Commissioner Of Income Tax, Bikaner v. The Ganganagar Kendriya Sahakari Bank Ltd. Sri Ganganagar

1.COMMISSIONER OF INCOME TAX, BIKANER VS. THE GANGANAGAR KENDRIYA SAHAKARI BANK LTD. SRI GANGANAGAR (D.B.INCOME TAX APPEAL NO.272/13) 2.COMMISSIONER OF INCOME TAX, BIKANER VS. THE GANGANAGAR KENDRIYA SAHAKARI BANK LTD. SRI GANGANAGAR(D.B.INCOME TAX APPEAL NO.10/15) Dated:- 6.5.16. HON'BLE MR.JUSTICE SANGEET LODHAHON'BLE MR.JUSTICE KAILASH CHANDRA SHARMA Mr.Sheetal Kumbhat, for the appellant. 1.These appeals are directed against orders dated 18.6.13and 23.7.14 of Income Tax Appellate Tribunal (ITAT), JodhpurBench, Jodhpur passed in I.T.A. No.417/Ju/2011 andI.T.A.No.139/Jodh/2014 respectively, whereby the penaltyimposed on the assessee by the Assessing Officer (AO) underSection 271(1)(c) of the Income Tax Act, 1961 ( for short “theAct”), affirmed by Commissioner of Income Tax (Appeals) [CIT(A)], Bikaner, relating to the assessment year 2007-08 and2008-09, stands set aside. 2.The assessee, a cooperative bank, filed Returns of incomefor the assessment year 2007-08 and 2008-09, claimingdeductions under Section 80P (2) (a) of the Act. During thecourse of assessment proceedings, it was revealed that the claimof deduction under Section 80P(2)(a) is not allowable as per the provisions of Section 80P(4) as amended w.e.f. 1.4.07. Afterseeking clarification of the assessee, the claim of the assesseeunder Section 80P(2)(a) was disallowed. Consequently, thepenalty proceedings under Section 271(1)(c) of the Act, wereinitiated against the assessee for giving inaccurate particularsand claiming wrong deductions. The AO imposed the penalties ofRs.1,09,75,240/- and Rs.50,00,000/- on the assessee underSection 271(1)(c) of the Act for the assessment year 2007-08and 2008-09 respectively. The appeals preferred by the assesseeagainst the penalty orders were dismissed by the CIT(A),Bikaner. Aggrieved thereby, the appeals preferred by theassessee have been allowed by the ITAT as aforesaid. Hence,these appeals. 3.Learned counsel appearing for the appellant contendedthat the assessee had made false claim consciously and thus, thepenalty imposed under Section 271(1)(c), cannot be faultedwith. Learned counsel submitted that the false claim raised bythe assessee, which is availing the assistance of the CharteredAccountants, having expertise in the tax laws, cannot be said tobe bona fide. 4.Indisputably, an amendment in Section 80P (4) excludingthe cooperative societies from the ambit of benefits underproviso to Section 80P(2), came into force w.e.f. 1.4.07 andtherefore, the assessee being under misconception regarding availability of benefit of exemption, cannot be ruled out. Thelearned ITAT has categorically held that it cannot be said to be acase of consciously making a false claim rather, it is a case ofmaking a wrong claim driven by situation created as a result ofamendment in the relevant provision. In this regard, the ITAThas relied upon a decision in the matter of “CIT vs. ReliancePetroproducts Pvt. Ltd.”, 322 ITR 158, wherein the Hon'bleSupreme Court categorically held that by no stretch ofimagination can making of an incorrect claim tantamount tofurnishing inaccurate particulars. 5.It is not the case of the Revenue that the particulars of theincome supplied by the assessee in its return are found to beincorrect, erroneous or false and thus, merely a wrong claimmade by the assessee under misconception of availability ofexemption cannot attract provisions of penalty under Section271(1)(c) of the Act. The issue in this regard having been settledby the Hon'ble Supreme Court in Reliance Petroproducts Pvt.Ltd.'s case (supra), relied upon by the ITAT, no substantialquestion of law arises for consideration of this court in thepresent appeals. 6.Accordingly, the appeals are hereby dismissed. (KAILASH CHANDRA SHARMA),J. (SANGEET LODHA),J.