Nirma Limited Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that imposition of penalty under section 271(1)(c) of the Income Tax Act unjustified as denial of claim of deduction u/s 80HH/ 80IA doesn’t tantamount to concealment of income and/or furnishing of inaccurate particulars of income.
Facts- Penalty under section 271(1)(c) of the Act was levied by AO for concealing/ furnishing inaccurate particulars of income to the tune of Rs.52,46,045/- which was confirmed by the ld.CIT(A) to the extent of Rs.47,55,054/- noting the fact that initial additions made by the AO on which penalty was levied amounting to Rs.1,22,00,106/- had been curtailed to the extent of Rs.1,14,96,058/- resulting in penalty of Rs.47,55,054/-. The penalty was levied on claim of deduction u/s. 80IA and 80HH of the Act denied to the assessee in respect of its various divisions.
Conclusion- Held that the issue of denial of claim of deduction under section 80HH/80IA of the Act on interest on FDs and others, is a debatable issue, and considering the fact that it is not the case of the Revenue that the assessee has not furnished complete particulars relating to the same or has concealed any particulars of income relating to the same the mere denial of claim of deduction will not tantamount to concealment of income and/or furnishing of inaccurate particulars of income so as to attract levy of penalty under section 271(1)(c) of the Act.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
Present appeal has been filed by the assessee against the order of the ld.Commissioner of Income Tax (Appeals)-9, Ahmedabad dated 11.07.2019 passed under section 250(6) of the Income Tax Act, 1961 (hereinafter referred to as “the Act” for short) vide which the ld.CIT(A) confirmed order of the AO passed, levying penalty for concealing/furnishing inaccurate particulars of income under section 271(1)(c) of the Act for the Asst.Year1997-98.
2. The grounds raised by the assessee are as under:
i) In law and in facts and circumstances of the appellant’s case, the ld.CIT(A) has grossly erred in points of law and facts.
ii) In law and in facts and circumstances of the appellant’s case, the ld.CIT()A) has grossly erred in dismissing appellant’s case ground regarding passing order u/s.271(1)(c) of the Act beyond the prescribed time.
iii) In law and in facts and circumstances of the Appellant’s case, the ld.CIT(A) has grossly erred in confirming penalty levied u/s.271(1)(c) of the I.T.Act for Rs.47,55,054/-.
3. As transpires from order of the authority below penalty under section 271(1)(c) of the Act, for concealing/ furnishing inaccurate particulars of income, was levied by the AO to the tune of Rs.52,46,045/- which was confirmed by the ld.CIT(A) to the extent of Rs.47,55,054/- noting the fact that initial additions made by the AO on which penalty was levied amounting to Rs.1,22,00,106/- had been curtailed to the extent of Rs.1,14,96,058/- resulting in penalty of Rs.47,55,054/-. The penalty was levied on claim of deduction under sections 80IA and 80HH of the Act denied to the assessee in respect of its various divisions as under:
