No section 271(1)(c) penalty for mere section 35(2)(AB) claim disallowance

DCIT Vs Polyplex Corporation Limited (ITAT Delhi)

Polyplex Corporation Limited, the assessee, filed its income tax return for the assessment year 2016-17 declaring a total income of INR 14,22,64,180/-. The return was selected for scrutiny assessment, and during the assessment, certain deductions claimed under section 35(2)(AB) of the Income Tax Act were disallowed by the Assessing Officer (AO) to the tune of INR 1,76,87,054/-. This disallowance led to the initiation of penalty proceedings under section 271(1)(c) by the AO, resulting in the imposition of a penalty of INR 60,11,830/-

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