CIT Vs Corteva Agriscience Pvt. Ltd (Delhi High Court)
Delhi High Court, in the consolidated appeals of CIT vs Corteva Agriscience Pvt. Ltd. (formerly M/s PHI Seeds Private Limited), has dismissed the appeals filed by the Income Tax Department (Revenue) and ruled in favour of the assessee. The central issue before the Court was the validity of the penalty imposed on the company under Section 271(1)(c) of the Income Tax Act, 1961 (the Act), with the Court affirming the Income Tax Appellate Tribunal’s (ITAT) decision to quash the penalties.
Background of the Case
The dispute involved four appeals concerning four different Assessment Years (AYs): 2002-03, 2003-04, 2005-06, and 2010-11. As the issue across all appeals was identical and related to the same assessee, the High Court decided them through a common order.
The assessee, engaged in agriculture activities like the production and sale of seed crops, initially filed its return for AY 2002-03 declaring an income of Rs. 38,53,720/-. Subsequently, the Assessing Officer (AO) completed the assessment under Section 143(3), assessing the income at Rs. 3,27,75,246/- and simultaneously initiated penalty proceedings under Section 271(1)(c) of the Act.
The assessee challenged the assessment order through the Commissioner of Income Tax (Appeals) [CIT(A)] and then before the ITAT, both of which initially upheld the assessment. Following this, on July 31, 2008, the AO imposed a significant penalty of Rs. 2,49,97,905/- for furnishing inaccurate particulars of income. The CIT(A) upheld the penalty order, leading the assessee to appeal to the ITAT.
