The Commissioner Of Income Tax v. M/S Lakhani India Limited

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.675 of 2008Date of decision: 16.12.2008 The Commissioner of Income Tax. Vs. M/s Lakhani India Limited. -----Appellant -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOELHON'BLE MR JUSTICE L.N. MITTAL Present:-Mr. Yogesh Putney, Sr. Standing Counselfor the appellant.-----for the appellant.----- ORDER: The revenue has preferred this appeal under Section 260Aof the Income Tax Act, 1961 (for short, “the Act”) against the orderdated 28.12.2007 passed by Income Tax Appellate Tribunal, DelhiBench ‘H’, New Delhi in I.T.A. No.1165/DEL/2007 for the assessmentyear 2000-01, proposing to raise following substantial questions of law:- “1. Whether on the facts and in the circumstances of thecase, the Hon’ble ITAT was right in law in upholdingthe order of the Ld. CIT(A) who deleted the penalty ofRs.13,50,291/- imposed u/s 271(1)(C) of the IncomeTax Act on account of excess deduction claimed bythe assessee u/s 80 HHC by taking whole of the profitfrom export unit as eligible for deduction instead ofcase, the Hon’ble ITAT was right in law in upholdingthe order of the Ld. CIT(A) who deleted the penalty ofRs.13,50,291/- imposed u/s 271(1)(C) of the IncomeTax Act on account of excess deduction claimed bythe assessee u/s 80 HHC by taking whole of the profitfrom export unit as eligible for deduction instead of 4. taking into account the ratio of export turnover to totalturnover while computing the said deduction?” Whether on the facts and in the circumstances of thecase, the Hon’ble ITAT in deleting the penalty leviedby Assessing Officer u/s 271(1)(c) in contravention ofthe order of the Hon’ble Madras High Court in thecase of M. Sajjanraj Nahar Vs. CIT (293 ITR 230) andalso in view of section 271(1B) of the Income Tax Actis correct, when the Assessing Officer had recordedinitiation of penalty proceedings u/s 271(1)(c) in theassessment order?” Whether the Hon’ble ITAT in deciding that provingcontumacious intent is an essential ingredient in lelvyof penalty in contravention of the provisions of a CivilStatute like Income Tax Act inspite of three being somany judgements that breach of a civil obligationattracts levy of penalty whether the contravention wasmade by the defaulter with any guilty intention or not?”Whether on the facts and in the circumstances of thecase, the Hon’ble ITAT is right in law in relying uponthe case law in CIT Vs. N. Krishnan 240 ITR 47, 107Taxmann 283(Ker.), 153 CTR 450 when in thepresent case, the issue is that of book profits u/s115JA, whereby income was assessed at a positivefigure and assessed income was not loss?” The Assessing Officer did not accept computation ofdeductions claimed by the assessee under Section 80 HHC of the Actwhile adding back the amount wrongly claimed to be deduction, penaltywas also imposed. On appeal, CIT(A) deleted the penalty on theground that merely for raising a debatable issue, penalty could not beimposed, in absence of any concealment or misrepresentation by theassessee. The said finding has been affirmed by the Tribunal infollowing terms:- The Assessing Officer did not accept computation ofdeductions claimed by the assessee under Section 80 HHC of the Actwhile adding back the amount wrongly claimed to be deduction, penaltywas also imposed. On appeal, CIT(A) deleted the penalty on theground that merely for raising a debatable issue, penalty could not beimposed, in absence of any concealment or misrepresentation by theassessee. The said finding has been affirmed by the Tribunal infollowing terms:- “....The Assessee during penalty proceedings claimed thatthere is no concealment and the addition/disallowances hasbeen made on account of difference of opinion. This factualmatrix was not controverted by the revenue. Now thequestion arises whether penalty can be imposed on accountof difference of opinion. The obvious reply ‘no’ because thewhole problem started due to the difference of opinion,therefore, it cannot be said that the assessee furnishedinaccurate particulars of income or concealed its incomewhich are the necessary ingredients for imposing penaltyu/s section 271(1)(c) of the Act. The Ld. counsel for theassessee, during arguments contended that the matter wascontroversial till the decision of the Hon’ble Apex Court inIpca Laboratories was delivered as at the relevant time thedecision in the case of ACIT vs. Avon Cycles Ltd. (82 TTJ127) (Chd) (ITAT) and Ipca Laboratories vs. Dy. CIT(251ITR 401) (Bom) was in favour of the assessee. It was alsopleaded that in the own case of the assessee forassessment year 1998-99, the impugned addition wasdeleted by the Ld CIT(A) vide order dated 12.9.2006. In thepresent appeal also the claim of the assessee was dulysupported by certificate of Chartered Accountant. It ispertinent to mention here that the decision of the Bombay High Court in the case of Ipca Laboratories Ltd. (supra) wasin favour of the assessee when the return was filed.However, this decision was later on reversed by the Hon’bleApex Court. In view of these facts, it cannot be said that theassessee concealed its particulars of income.” We have heard learned counsel for the revenue. In view of finding concurrently recorded by the CIT(A) andthe Tribunal that there was no concealment or misrepresentation by theassessee, we do not find any fault with the impugned order settingaside the levy of penalty. No substantial question of law arises. The appeal is dismissed. ( ADARSH KUMAR GOEL )JUDGE December 16, 2008ashwani ( L. N. MITTAL ) JUDGE