The Commissioner Of Income Tax-13, Mumbai v. Dushayant Development Corporation

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1714 OF 2013 The Commissioner of Income Tax-13, Mumbai..Appellant Vs. Dushayant Development Corporation ..Respondent .... Mr. P.C. Chhotaray, Advocate for Appellant.Mr. B.V. Jhaveri, Advocate for Respondent. .... P.C.: CORAM : M.S. SANKLECHA & N.M. JAMDAR, JJ. DATED : 7 JULY 2015 This appeal by revenue under Section 260A of the IncomeTax Act, 1961 (the 'Act') challenges the order dated 1 February2013 passed by the Income Tax Appellate Tribunal (the 'Tribunal').The appeal relates to the Assessment Year 2004-05. The impugnedorder set aside penalty imposed under Section 271(1)(c) of the Acton invoking Section 273B of the Act. 3.The revenue has framed the following questions of law for our consideration: “(i)Whether on the facts and in thecircumstances of the case and in law, the Tribunal is S.S.DESHPANDE correct in canceling the penalty u/s 271(1)(c) imposedby the A.O. when the revised return was filed after thesurvey was done. (ii)Whether the Tribunal has rightly held thatthe revised return filed by the Assessee in the presentcase is voluntarily even though it is filed after surveyreport.” 4.The respondent-assessee had filed return of incomeclaiming benefit of deduction under Section 80IB(10) of the Act inrespect of its building project called New Haridas Park bearing WingA to D. Thereafter there was a survey conducted on the appellant'spremises. Subsequent thereto, the respondent-assessee filed arevised return of income withdrawing its claim for the benefit ofSection 80IB(10) of the Act in respect of its building project calledNew Haridas Park consisting of Wings being A to D on the groundthat as it is part of the original project of Haridas Project consistingof Wings A to G. The Revised Return was held to be invalid by theAssessing Officer who also imposed a penalty of Rs.17.87 lacs underSection 271(1)(c) of the Act for having furnished inaccurateparticulars. 5.In appeal, the CIT(A) upheld the imposition of penaltyunder Section 271(1)(c) of the Act. On further appeal, the Tribunalby the impugned order concluded that there was a basis for therespondent-assessee to claim that Wings A to D constructed by itwould be a separate project from the original project of “HaridasPark” consisting of Wings E to G. The second phase requiredextensive modification of the plan. It was for these considerationsthat the Tribunal accepted the alternative contention that in anyevent the view taken by the respondent-assessee that Wings A to Dformed a separate project was in the facts, a plausible view.Therefore there was a reasonable cause for the respondent-assesseehaving incorrectly claimed the benefit of Section 80IB(10) of theAct. Thus the impugned order held no penalty be imposed in viewof Section 273B of the Act. 6.The grievance of the revenue is that the respondent-assessee is not entitled to claim the benefit of Section 80IB(10) ofthe Act in respect of project Wings A to D. There is no dispute withregard to the same. It is further submitted that the revised returnwas filed only after the survey was conducted by the revenue. This is not factually correct as the Tribunal in the impugned orderobserves that there was nothing on record to indicate what was thefinding in survey. In the absence of some positive evidence on thepart of the revenue that it is the survey which led the respondent-assessee to file revised return of income and/or withdraw its claimfor the benefit of Section 80IB of the Act, it is not open to hold thatonly because of the survey, the claim for benefit of Section 80IB ofthe Act was withdrawn. 7.In these circumstances, we find that the view taken by theTribunal on the facts before it was a very possible view. Thus thequestions of law as proposed by the revenue are not substantialquestions of law. 8.Accordingly, the appeal is dismissed. No order as tocosts. [N.M. JAMDAR, J] is not factually correct as the Tribunal in the impugned orderobserves that there was nothing on record to indicate what was thefinding in survey. In the absence of some positive evidence on thepart of the revenue that it is the survey which led the respondent-assessee to file revised return of income and/or withdraw its claimfor the benefit of Section 80IB of the Act, it is not open to hold thatonly because of the survey, the claim for benefit of Section 80IB ofthe Act was withdrawn. 7.In these circumstances, we find that the view taken by theTribunal on the facts before it was a very possible view. Thus thequestions of law as proposed by the revenue are not substantialquestions of law. 8.Accordingly, the appeal is dismissed. No order as tocosts. [N.M. JAMDAR, J] [M.S. SANKLECHA, J.]