The Commissioner Of Income Tax - 9, Mumbai v. M/S.telebuild Constructions Private Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.5553 OF 2010 The Commissioner of Income Tax - 9, Mumbai..Appellant. Versus M/s.Telebuild Constructions Private Limited..Respondent. Mr.Suresh Kumar for the appellant.None for the respondent. CORAM : J.P. Devadhar & A.A. Sayed, JJ. P.C. : DATE : 20[th] July, 2011. 1.Whether the Income Tax Appellate Tribunal was justified in deleting the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 is the basic question raised in this Appeal. 2.In the present case, the assessee in the Return of Income relating to assessment year 2004-05 claimed deduction under Section 80IB(10) of the Income Tax Act, 1961. During the course of assessment proceedings, the assessee gave up its claim seeking deduction under Section 80IB(10). The Assessing Officer while disallowing claim under Section 80IB(10), imposed penalty under Section 271(1)(c) of the Act. The Tribunal has deleted the penalty on the ground that the assessee bona fide believed that it was entitled to deduction under Section 80IB(10) and when it was pointed out that the assessee was not entitled to claim deduction, the assessee gave up its claim for deduction under Section 80IB(10). The Tribunal has recorded a finding of fact that the assessee had disclosed all material facts necessary for the assessment and only dispute was regarding interpretation of relevant provisions of law regarding allowability of deduction under Section 80IB(10). The Tribunal has held that in view of the bona fide action on the part of the assessee, it is not a fit case for levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961. 3.In our opinion, the discretion exercised by the Tribunal does not call for any interference. The appeal is accordingly dismissed with no order as to costs. (A.A. Sayed, J.) (J.P. Devadhar, J.)