The Commissioner Of Income Tax v. M/S Oriental Rugs Co

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.227 of 2010 Date of decision: 20.9.2010 The Commissioner of Income Tax. -----Appellant. Vs. M/s Oriental Rugs Co. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Yogesh Putney, Sr. Standing Counselfor the appellant. --- ADARSH KUMAR GOEL, J. This appeal has been preferred by the revenue underSection 260-A of the Income Tax Act, 1961 (for short, “the Act”)against the order dated 2.4.2009 of the Income Tax AppellateTribunal, New Delhi in I.T.A. No.3629/Del)/08 for the assessmentyear 2002-03 proposing to raise following substantial questions oflaw:- “i)Whether on the facts, and in the circumstances of thecase, the Income Tax Appellate Tribunal was right inlaw in deleting the penalty imposed u/s 271(1)(c) onthe amount of deduction claimed u/s 80IB on exportincentives by holding that there was no deliberatefurnishing of inaccurate particulars by the assessee,given the fact that the decision of the Hon’bleSupreme Court in Sterling Foods Vs. CIT dated15.04.1999 (237 ITR 579) disallowing claim ofdeduction under Chapter VIA of the Act on exportincentives was already available to the assessee atcase, the Income Tax Appellate Tribunal was right inlaw in deleting the penalty imposed u/s 271(1)(c) onthe amount of deduction claimed u/s 80IB on exportincentives by holding that there was no deliberatefurnishing of inaccurate particulars by the assessee,given the fact that the decision of the Hon’bleSupreme Court in Sterling Foods Vs. CIT dated15.04.1999 (237 ITR 579) disallowing claim ofdeduction under Chapter VIA of the Act on exportincentives was already available to the assessee at ii) iii) the time of filing of return of the income tax for Asstt.Year 2002-03, and therefore, the assessee wasevidently filing inaccurate particulars of income inclaiming deduction u/s 80IB on export incentives? Whether the decision of the Income Tax AppellateTribunal to delete the penalty u/s 281(1)(c) of the Actis justified in the light of the decision of the Hon’bleSupreme Court in Liberty India Vs. CIT (317) ITR218), whereby the non-allowability of 80IB deductionon export incentives has been re-affirmed? Whether the decision of the Income Tax AppellateTribunal quashing the penalty order u/s 271(1)(c) onthe ground that there is no deliberate concealment isjustified in the light of the decision of the Hon’ble ApexCourt in Dharmendra Textile Processors and others306 ITR 277 (SC) which has held that mens rea is notan essential ingredient for levy of penalty u/s 271(1)(c)of the Act, and that levy of such penalty is mandatoryas remedy for loss to revenue, and given the fact thatsuch loss to revenue has occurred in the instant casedue to wrong claim by the assessee with respect todeduction u/s 80IB?” It is not disputed that identical appeal of the revenuebeing I.T.A. No.225 of 2010CITv. M/s Raj Overseashas beendismissed by this Court vide order dated 28.7.2010. Accordingly, this appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE September 20, 2010ashwaniashwani ( AJAY KUMAR MITTAL ) JUDGE