Commissioner Of Income Tax,Central-Iv v. M/S. Roha Dyechem Private Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1570 OF 2011 Commissioner of Income Tax,Central-IV ..Appellant versus M/s. Roha Dyechem Private Ltd...Respondent -------- Mr. Suresh Kumar i/b Mrs. Padma Divakar for the Appellant.Mr.NirajSethi/bRajeshShah&Co. for the Respondent. ............. CORAM : J.P. DEVADHAR & M.S.SANKLECHA, JJ. DATE : 31[st] January, 2013 P.C.: 1 In this appeal by the revenue for the Assessment Year 2001-02, the following questions of law have been raised for our consideration. a)Whether on the facts and in the circumstances of the case and in law the Tribunal, was justified in holding that thepenaltyu/s271(1)(c)for concealment of income was not leviable ignoring that the assessee had furnished inaccurate particulars of income by wrongly showing interest income as business income instead of income from other sources with the motive to claim deduction u/s 80IB? b) Whether on the facts and in the circumstances of the case and in law the Tribunal, was justified in holding that the assesee had not concealed any incomenotfurnishedinaccurate particulars of its income ignoring that the assessee had made wrong claim of deduction u/s 80IB by including Government Incentives i.e. DEPB/Duty Draw Back as part of profit from the undertaking eligible for deduction u/s 80IB of the Act? c) Whether on the facts and in the circumstances of the case and in law the order of the Tribunal holding that the addition on account of disallowance u/s 80IB relating to interest income and the Government incentives was due to change of opinion was perverse, since in earlier years the claim of deduction u/s 80IB was disallowed outright on different ground that no new unit had come into existence? d) Whether on the facts and in the circumstances of the case and in law the Tribunal, was justified in deleting the penalty of rs.34,68,047/- levied u/s 271(1)(c) of the act ignoring that mens rea is not the essential ingredient for levy of penalty u/s 271(1)(c) of the I.T.Act, 1961? 2The basic issue in this appeal is leviability of penalty under Section 271(1)(c) of the Income Tax Act, 1961 for claiming deduction on account of interest income and exclusion of export incentives while computing deduction under Section 80IB of the I.T.Act, 1961. The Tribunal in the impugned order has held that there was complete disclosure on the part of the respondent-assessee. Further, on the same facts the deduction under Section 80IB of the I.T.Act, 1961 had been allowed for the past nine years. Thus, the disallowance was not on account of concealing or furnishing of inaccurate particulars of income. Moreover, the issue on merits was highly debatable as there was difference of views between different High Courts which was finally settled by the Apex Court in the matter of Liberty India v. CIT, reported in 317 ITR page 218. The Tribunal also relied upon the decision of the Apex Court in the matter of CIT v. Reliance Petro Chemicals Pvt. Ltd, reported in 322 ITR page 158 holding that no penalty was imposable merely because the claim made by the assessee was found unsustainable in law. 3In view of the above, we find no fault with the order of the Tribunal in deleting the penalty. Thus, we see no reason to entertain the proposed questions of law. 4 Accordingly, the appeal is dismissed with no order as to costs. (M.S. SANKLECHA, J.) (J.P.DEVADHAR, J.)