Hon’ble Supreme Court in the case of M/s Hindustan Steel Ltd. vs State of Orissa (1972) 83 ITR 26(SC) and decision of Hon’ble High Court of Delhi in Escorts Finance Ltd. (2009) 226 CTR (Del) 105 wherein it was held that where facts are clearly disclosed in the return, penalty cannot be levied merely because an amount is not allowed or taxed as income.
Turning to the facts and circumstances of the present case, admittedly, the assessee made claim of deduction u/s 80HHC of the Act which was reduced during the reassessment proceedings finalized u/s 263/143(3) of the Act and a substantial part of the claim of the assessee for deduction u/s 80HHC of the Act was reduced and the AO held that the assessee was entitled to claim deduction u/s 80HHC of the Act of Rs.25,13,742 or against the deduction of Rs.58,00,945 as claimed by the assessee in its return of income. In this factual matrix, while the AO passed an order of reassessment in pursuance to order of CIT u/s 263 of the Act and on recomputation of deduction, the AO allowed the claim of the assessee for deduction u/s 80HHC Act at a lower figure but even in this situation, it cannot be inferred that the assessee has concealed its particulars of income or has furnished inaccurate particulars of its income. Thus, we come to a conclusion that the CIT was right in following decision of Hon’ble Supreme Court in the case of CIT vs Reliance Petroproducts Pvt. Ltd. (supra) and the CIT deleted the penalty on just and cogent reason because penalty cannot be levied merely because the assessee’s claim was not accepted or was not acceptable to the revenue, that by itself would not attract the penalty u/s 271(1)(c) of the Act. Accordingly, we are unable to see any ambiguity, perversity or any other valid reason to interfere with the impugned order and appeal of the revenue being devoid of merits is dismissed.