The Commissioner Of Income-Tax-Ii, Amritsar v. Bal Kishan Dhawan, Huf

Income Tax Appeal No.209 of 2013 1 IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. Income Tax Appeal No.209 of 2013 Date of Decision: 8.10.2013 The Commissioner of Income-tax-II, Amritsar ..Appellant versus Bal Kishan Dhawan, HUF, Prop.M/s B.K.D. Enterprises, Amritsar ..Respondent CORAM:HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOONPresent:Mr. Danesh Goyal, Advocate, for the appellant. RAJIVE BHALLA,J. The revenue challenges order dated 08.03.2013 passedby the Income Tax Appellate Tribunal on the following questions oflaw:- “ (i)Whether the Hon'ble ITAT was correct in upholdingthe deletion of penalty imposed u/s 271(1)(c) of theIncome Tax Act, 1961 of Rs.19,88,401/-by applying theratio of Reliance Petro Products Pvt. Ltd.322 ITR 158while the facts of the case and the questions involved inthe present case are completely different from the saidcase. (ii)Where the basic conditions of claiming a deductionis not fulfilled, whether the act of claiming a deduction byan assessee in full knowledge of facts would affectpenalty U/s 271(1)(c) of the Act; and Income Tax Appeal No.209 of 2013 2 (iii)Whether wrong claim for deduction u/s 80IB couldbe attributed to a bonafide mistake and therefore penaltyu/s 271(1)(c) is not attracted against the assessee.” Counsel for the appellant submits that as the assesseedid not fulfil the basic conditions for claiming deduction, his claim fordeduction was clearly mala fide, thereby rightly inviting penalty.Therefore, order passed by the Income Tax Appellate Tribunal,setting aside the penalty by placing reliance upon a judgment of theHon'ble Supreme Court, in CITversus Reliance Petro Products Pvt.Ltd.322 ITR 158,is clearly misplaced. We have heard counsel for the appellant and find noreason to hold that any substantial question of law arises forconsideration. The Assessing Officer rejected the assessee's claim fordeduction under Section 801B and simultaneously imposed penalty.Aggrieved by the said order, the assessee filed an appeal. TheCommissioner of Income Tax (Appeals) dismissed the appeal, butset aside the penalty. The appellant and the revenue filed separateappeals before the Income Tax Appellate Tribunal. The appeal filedby the revenue, challenging deletion of penalty, was dismissed. The Commissioner of Income Tax as well as the Income Tax AppellateTribunal have recorded concurrent findings of fact that as theassessee was allowed deduction under section 801B of the Act forassessment years 2004-05 and 2005-06, but disallowed similardeduction for assessment year 2006-07 as the assessee's returnsVarinder Kumarwere beyond the period prescribed by Section 139(1) of the Act, it2013.10.23 14:59I attest to the accuracy andintegrity of this documentHigh Court Chandigarh Income Tax Appeal No.209 of 2013 3 cannot be said that the claim for deduction under section 801B of theAct was mala fide or raised with an object to evade tax. TheCommissioner of Income Tax (Appeals) as well as the Income TaxAppellate Tribunal have rightly placed reliance upon a judgment ofthe Hon'ble Supreme Court in CIT versus Reliance Petro ProductsPvt. Ltd.322 ITR 158,wherein, while considering the question of levyof penalty, it was held that the mere fact that an assessee's claim fordeduction is not accepted, does not automatically invite penalty. Therevenue has not been able to establish any fact that would enable usto hold that deduction claimed by an assessee was mala fide orraised with the object of evading tax. In view of what has been stated hereinabove, as nosubstantial question arises for adjudication, the appeal is dismissed. ( RAJIVE BHALLA ) JUDGE 08.10.2013VK ( DR. BHARAT BHUSHAN PARSOON ) JUDGE