Bombay High Court
Cit vs Tata Teleservices Mah. Ltd. on 15 January, 2008
Bench: F.I. Rebello, R.S. Mohite
JUDGMENT
1. The appeal has been preferred on the following question:
Whether on the facts and in the circumstances of the case and in law, was the Hon'ble Tribunal right in upholding the action of Commissioner (Appeals) incancelling the penalty levied by the assessment year under Section 271(1)(c), ignoring thefact that asscssee failed to withdraw its claim of deduction under Section 35ABB, despite the fact that the deduction was not: available in light ofthe amended provisions of Section 35ABB, coming into iforce retrospectivelywith effect from 1-4-1996.
2. The Tribunal by its impugned order held as under:
We have duly considered the rival contentions. On perusal of the record, we find that along with computation of return assessee has duly disclosed the basis for claiming deduction under Section 35ABB. It has also disclosed that it is the first year of business and P&L a/c has not been prepared. When the assessee filed its return old provisions were in operation according to which assessee is entitled to deduction under Section 35ABB. The amendment in Section 35ABB has been made subsequent to filing of the return which empowers the assessing officer to disallow the claim of assessee but as observed by the Hon'ble Supreme Court in the above authoritative pronouncement penalty could not be justified on the basis of retrospective application of law. We have to see the element of concealment on the date when the return was filed. On that date the amended provision was not in picture, it cannot be said that' assessee has concealed the particulars of income or furnished inaccurate particulars. More so in the note extracted above everything has been duly disclosed by the assessee. Hence, taking into consideration the overall circumstances we do not find any error in the order of learned Commissioner (Appeals). This appeal of the revenue is rejected.
3. The Tribunal also relied on the judgment of the Supreme Court in CIT v. Hindustan Electro Graphites Ltd. . On the consideration of the law pertaining to retrospective amendment the court has observed as under:
When additional tax has the imprint of penalty the revenue cannot say that levy of additional tax is automatic under Section 143(1A) of the Act. If additional tax could be levied in such circumstances, it will be punishing the assessee for no fault of his. That cannot ever be the legislative intent....
4. In the instant case, we are concerned with imposition of penalty. The ratio of the judgment of the Supreme Court in Hindustan Electro Graphites Ltd. (supra) squarely covers the facts of the present case. In the light of the above, question of law as raised would not arise. Consequently appeal is dismissed.