Penalty u/s 271(1)(c) unsustainable as issue already decided in assessee’s favour

IRCON International Ltd Vs DCIT (ITAT Delhi)

ITAT Delhi held that penalty under section 271(1)(c) of the Income Tax Act unsustainable as claim of deduction u/s. 80IA(4) already decided in favour of the assessee.

Facts-

The case of the assessee was selected for scrutiny and assessment was framed under section 143(3) and the total income of the assessee was determined at Rs.5,86,65,31,285, inter alia, by disallowing Rs.1,36,47,143 under section 14A of the Income Tax Act, 1961; exclusion of income under DTAA agreement and denying claim of deduction u/s 80IA(4).

On the disallowance/ additions made, the A.O. vide penalty order passed under section 271(1)(c) of the I.T. Act, 1961 levied the penalty. Aggrieved by the penalty order, the assessee preferred an appeal before the CIT(A) who granted partial relief. Aggrieved by the CIT(A), both assessee and revenue has preferred an appeal.

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