The Commissionerof Income Taxkarnal v. Sushi! Gupta

,""'.'\'-Ji... ."",""~-J:> a... ~ -¥- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Income Tax Appeal No. 793 of 2010Date of decision:12.1.2011 The Commissionerof Income TaxKarnal --- Appellant Versus Sushi! Gupta, Prop. of MIs. AalishanExports, Panipat. --- Respondent CORAM:HON'BlEMR. JUSTICE ADARSH KUMAR GOElHON'BlEMR. JUSTICE AJAY KUMAR MITTAl Pr~sent:iMr. Yogesh Putney, Senior Standing Counselfor the appellant. &lAY KUMAR MITTAl, J. By this order, four appeals, filed under Section 260A of theIntome-Tax Act, 1961 (for short "the Act") by the Revenue, i.e. IncomeTax Appeal Nos. 793, 799, 801 and 802 of 2010 are being disposed ofas they arise out of a common order, dated 17.3.2010, of the IncomeTax Appellate Tribunal, Delhi Bench 'G', New Delhi (in short "theTribunal"), relating to the assessment year 2000-2001.For facility ofdisposal, the facts are being taken from Income Tax Appeal No. 793 of2010. The Revenue has claimed that the following substantialquestions of law arise in these appeals for determination of this Court: -, i-0:::::J0UJ:-C)J:<tz<~~::r:cz<m«~z:J a.. ~ "1-Whetheron the facts and in the circumstancesof thecase, the learned Income Tax Appellate Tribunal was rightinlawin deletingthepenaltyimposedunderSection271 (1)(c) ontheamountofdeductionclaimedunderSection80-18 on export incentive,given the fact that thedecisionof the Hon'bleSupremeCourtin the casesofSterlingFoodsVs. CIT dated15.4.1999(237ITR 579)disallowingclaim of deductionunder ChapterVIA of theActonexportincentiveswasalreadyavailableto theassesseeat the time of filing the return of income for theassessmentyear 2000-01and, therefore,the assesseewasevidentlyfilinginaccurateparticularsof incomeinclaiming 80-18 on export incentives? 2-WhetherthedecisionofthelearnedIncomeTaxAppellateTribunalto deletethepenaltyunderSection271 (1)(c) of the Act is justified in the light of the decision ofthe Hon'bleSupremeCourt in Liberty India Vs. CIT (317ITR 218), whereby following the decisionof the Hon'bleSupremeCourt in Sterling Foods Vs. CIT dated 15.4.1999(237 ITR 579), the non-allowability of 80-18 deduction onexport incentives has been re-affirmed? 3- Whether the decision of the Ld. Income Tax AppellateTribunalquashingthepenaltyorderunderSection271(1)(c) on thegroundthatthereisnodeliberateconcealment is justified in the light of the decision of theHon'ble Apex Court in Dharmendra Textile Processor and ~..Jt>- others,306ITR 277 (SC), whereastheassesseehadoffered an explanationwhich could not be substantiatedinthe light of the Apex Court judgment referred in questionNo.(i)andoughttohavebeentakenasdeemedconcealmentwithin Explanation - 1(8) of Section 271 (1)(c)of the Income Tax Act, 1961?"The facts, in brief, necessary for adjudication, as narratedin the appeal, are that the return of income for the assessmentyear inquestion furnishedby the respondent-assesseeat an income of Rs.18,7601- was processedunder Section143(1)(a)of the Act.It wasdetected that since the turnover of the assessee for the financial year1:999-2000, relevant to the assessment year in question was more!ititian 10 crores, no deduction under Section 80HHC was allowable to ito~ profit on transfer of the Duty Entitlement Pass Book (DEPB) andt~e same having been wrongly allowed, notice under Section 148 wasI',iJsued to the assessee.IConsequently,the matter was decided underII.~ection143(3) of the Acton 30.10.2006wherebydeductionunderII!SectionI80-IBof Rs. 61, 26,445/-out of Rs. 1,10,07,743/-on totaljbusinessprofit of Rs. 5,50,57,472/-was disallowed.The assessingofficer, in particular, held that the assessee had furnished inaccurateparticulars of its income in form of claiming unallowable deductionunderSection80-IBon expqrtincentives.Besides,the assessingofficer also initiated proceedings against the assessee for imposition ofpenalty under Section 271(1)(c) of the Act and, thus, issued therequisitenotice.In theappealcarriedby theassessee,theCommissionerofIncome-tax(Appeals){inshort"theCIT(A)"}, j j observed in clear terms that on the issue of deductionunder Section80-IB, in the instant case two views were possible and the same weresupported by judicialpronouncements.The CIT(A) further observedthat in the scenarioof the present case it could not be said with adefiniteviewthattheassesseehadfurnishedanyinaccurateparticulars or had concealedany material.The CIT(A) consequently,deleted the penalty imposedunder Section 271 (1)(c) of the Act videorder dated 20.8.2009. The Revenuefeelingaggrieved~ approachedthe Tribunal ~c?rrying appeal against the order of the CIT(A).The Tribunalput itss~al of affirmationon the order of the lower appellateauthorityandi,dismissed"the Revenue's appeal by order dated 17.3.2011 and it isIIhfW the Revenueis once again in appealbefore us under Section2~OA of the Act. We have heard learned counsel for the parties and havep~rused the record.II! I p~rused the record. The only point for consideration by this Court is, whether init~efactsandcircumstances,thepenaltyimposedunderSection2t1(1)(c)of the Act on the amountwhich was wronglyclaimedasdeduction under SeCtion 80-18 on account of export incentive, hadbeen rightly deleted by the CIT(A) and affirmed by the Tribunal.Similar issue came up for considerationbefore this Court inIncome Tax Appeal No. 225 of 2010 (The Commissioner of IncomeTax Vs. Mis. Rai Overseas) decided on 28.7.2010 wherein it has beenheld as under: ~ I-~ ::» O.U J:-C)J: <Cz<~<CJ:Cz<CCD«.,z::) c.. ¥"YT~; 'tt.. ~h~ofueTax Appeal No. 793 of 2010 "4. In view of factual finding of the Tribunal, it cannot bedisputedthat the issuewas debatableand deductionclaimed by the Assesseedid not lack bonafides. In such asituation, penalty under Section 271(1) (c) of the Act wasnot attracted.In recent judgmentof the Hon'ble SupremeCourt in CIT v. ReliancePetroproducts(P) Ltd. [2010]230 CTR 320, the legal position to this effect has beenreiterated. Ifthe Assesseehas made full disclosure in thereturn, claim for deduction cannot be held to be giving ofinaccurate particulars. The view taken by the Tribunal is,thus, a possible view." In the case in hand, the Tribunal while upholding the orderof: CIT(A) deleting the penalty, had recorded that the claim of theiIa$sesseeIwas a bona fide claim for deduction and as such no penaltyI~w~s exigible. I In view of the above, there is no illegality in the orderi~pugned herein and, thus, finding no merit in the appeals, the sameIate dismissed. (AJAYKU~TTAL)JUDGE ~(ADARSH KUMAR GOEl)JUDGE January12, 2011*rkmalik*