Income Tax Appellate Tribunal - Delhi
Hcil Arsspl Triveni (Jv), Delhi vs Assessee on 27 July, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI 'C' BENCH
BEFORE SHRI C.L. SETHI, JM & SHRI A.N. PAHUJA, AM
ITA nos.4579 & 4580 /Del/2010
Assessment year:2007-08
1.M/s HCIL ARSSPL V/s. AC.I.T.,Circle-38(1),
TRIVENI (JV) and New Delhi
2.M/S HCIL KALINDEE
ARSSPL (JV),
113-A, Kamla Nagar,
Delhi-110007
[PAN No.: AADFH 8758 B]
Assessee by Shri K. Sampath, AR
Revenue by Shri Salil Mishra, DR
Date of hearing 09-11-2011
Date of pronouncement 25-11-2011
ORDER
A.N.Pahuja:- These two appeals filed on 15.10.2010 by the respective assessees against two separate orders dated 27th July, 2010 of the learned CIT(A)-XXVIII, New Delhi, raise the following similar grounds:-
i) "The penalty order passed by the learned Assessing Officer is bad both in law and facts of the case.
ii) That the learned Assessing Officer based the penalty order arbitrarily without considering the facts and circumstances of the case.
iii) It is prayed that the penalty imposed may please be deleted."
2 ITA nos.4579 & 4580 /Del/2010
2. Since, similar issues were involved, these appeals were heard simultaneously for the sake of convenience and are being disposed of through this common order.
3. Facts, in brief, as per relevant orders in the case of M/s HCIL ARSSSPL Triveni (JV), a joint venture of M/s Harish Chandra (India) Ltd.,M/s ARSS Infrastructure Projects Pvt. Ltd. And M/s Triveni Enterprises constituted in terms of an agreement entered on 28.9.2004., are that e-return declaring nil income filed on 01.11.2007 by the assessee, a civil contractor after being processed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the Act) was selected for scrutiny with the service of a notice issued u/s 143(2) of the Act on 16th September, 2008. During the course of assessment proceedings, the Assessing Officer (in A.O. in short) noticed that the assessee claimed deduction of ``41,83,622/- u/s 80IA of the Act in terms of a report in form no. 10CCB while the assessee sub-contracted the work to M/s HCIL. Since the assessee was engaged in the business of infrastructure for railways and did not execute the work on its own while M/s Rail Vikas Nigam Ltd. and M/s Rites Ltd. claimed deduction u/s 80IA of the Act in respect of the said project, the AO disallowed the claim for deduction u/s 80IA of the Act while referring to explanation below the provisions of sec. 80IA(13) of the Act. Inter alia, penalty proceedings u/s 271(1)(c) of the Act were also initiated for furnishing inaccurate particulars of income.
3.1 For similar reasons, deduction of `70,07,615/- u/s 80IA of the Act was disallowed in the case of M/s HCIL Kalindee ARSSPL (JV), a joint venture of M/s Harish Chandra (India) Ltd.,M/s Kalindee Rail Nirman (Engineers) Ltd. &M/s ARSS Infrastructure Projects Pvt. Ltd. constituted in terms of an agreement executed on 22.10.2005 and penalty proceedings u/s 271(1)(c) of the Act were initiated for furnishing inaccurate particulars of income.
3 ITA nos.4579 & 4580 /Del/2010
4. These assessees did not file any appeal against the findings of the AO. Subsequently, in response to a show cause notice issued before levy of penalty, the assessees replied that the assessee was advised to claim deduction u/s 80IA(4) of the Act since the nature of their activities fell under the work of infrastructure facility and one of the partners in joint venture was allowed deduction u/s 80IA(4) of the Act in the AYs 2006-07 & 2007-08. Since their case was covered within the explanation below sub- section 13 of section 801A of the Act ,inserted by the Finance Act,2007 w.e.f 1.4.2000, immediately on being pointed out they accepted the view of the AO and paid tax accordingly. However, there was no intention to furnish any inaccurate particulars of income , the assessees pointed out. Inter alia, the assessees relied upon the decisions in CIT Vs. S. Dhanabal (2009) 211 Taxation 128 (Delhi)& CIT Vs. Lotus Trans Travels (P) Ltd. (2009) 211 Taxation 481 (Delhi) and pleaded that deduction u/s 80IA having been claimed due to a bonafide mistake, penalty proceedings should be dropped. However, the AO did not accept the contentions of the assessee and imposed a penalty of ``13,52,107/- @100% of the tax sought to be evaded for furnishing inaccurate particulars of income for claiming deduction u/s 80IA of the Act.
4.1 Likewise in the case of HCIL-Kalindee-ARSSPL, the AO imposed a penalty of `23,02,665/- , relying, inter alia, on the decision in the case of Som Engg. Corporation Vs. CIT 277 ITR 92 (All.); Madanlal Kishorilal Vs. CIT,277 ITR 209 (All.) ; and Union of India Vs. Dharmindra Textile Processors,306 ITR 277 (SC).
5. On appeal, the learned CIT(A) upheld the levy of penalty in the following terms in the case of M/s HCIL ARSSPL Triveni(JV):
"6. The question for consideration is whether the claim for deduction was bona fide. In the assessment order, the AO has observed that "The assessee has not been able to substantiate with the evidence that his claims are true & bonafide".The AO has further observed that "The was not entitled to claim this deduction ab-initio as it was neither the owner of this infrastructure nor the infrastructure belongs to it. It has merely developed the project on contractual basis. So the 4 ITA nos.4579 & 4580 /Del/2010 eligibility for claiming deduction does not arise from the beginning itself." Had the case not been selected for scrutiny under CASS, this deduction would have otherwise gone to the assessee causing loss of revenue because of wrong inadmissible claim of deduction."
7. Considering the facts mentioned in the assessment order, the appellant was clearly not eligible for deduction u/s 801A.
Section 801A(4) is as follows:-
This section applies to-
i) any enterprise carrying on the business /of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining/ any infrastructure facility which fulfills all the following conditions, namely-
The Explanation below section (13) is as follows:
For the removal of doubts, it is hereby declared that nothing contained in this section shall apply to a person who executes a works contract entered into with the undertaking or enterprise, as the case may be.
8. The appellant is not a 'developer' in terms of section 80IA(4) and is not eligible for deduction u/s 80IA. Whatever doubt may have existed in this regard stood clarified by the insertion of the Explanation below section 80IA(13) w.e.f. 01.04.2000.The appellant has not filed any quantum appeal against the rejection of his claim for deduction u/s 80IA and the issue stands concluded against the appellant. In fact, there can be no dispute that the appellant is not eligible for claiming this deduction. In the assessment order, the AO has given detailed reasons why there is no question of allowing this deduction in such a case. As discussed above, whatever doubt may have existed in this regard had been put to rest by the introduction of the Explanation below section 80IA(13).
9. The Explanation below section 80IA(13) was inserted by the Finance Act,2007 w.e.f 1.4.2000.The Finance Bill 2007 became the Act on receiving Presidential assent on 11.5.2007 (2007) 291 ITR (St.) 1). The appellant filed his return on 01.11.2007. Therefore, the Explanation was on the statute book when the assessee filed his return. At that time, the claim made by the assessee was not a debatable issue at all. In view of these facts, the appellant's argument that his claim was for deduction was bona fide, is entirely unacceptable. The claim made in the statement of facts that this "is 5 ITA nos.4579 & 4580 /Del/2010 a bonafide mistake on the part of the appellant and not deliberate mistake committed by the appellant" is also unacceptable. The appellant was clearly not eligible for deduction u/s 801A in view of the conditions specified in Section 80A(4). Whatever doubt may have existed in this regard stood clarified by the insertion of the Explanation below section 801A(13) w.r.e.f. 01.04.2000. This Explanation was on the statute book when the assessee filed his return. It is, therefore, clear that the claim for deduction u/s 801A was not bonafide and not based on any reasonable interpretation of law.
10. The above discussion shows that this is not a case where the explanation given was bona fide and there was full disclosure of facts.The provisions of Explanation 1(B) to section 271(1)(c) are applicable because the assessee has offered an explanation before the Assessing Officer, which he is not able to substantiate and has also failed to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him. In view of these facts, the penalty imposed u/s 271(1)(c) deserves to be upheld.
11. In the assessment order, the Assessing Officer has discussed various judicial decisions on this subject. The imposition of penalty is also supported by the following judicial decisions.
i) CIT v Escorts Finance Ltd.,183 Taxman 453(Del) "Even if there is no concealment of income or furnishing of inaccurate particulars, but on the basis thereof the claim which is made is ex facie bogus, it may still attract penalty provision. Cases of bogus hundi loans or bogus sales or purchases have been treated as that of concealment or inaccuracy in particulars of income by the judicial pronouncements (See Krishna Kumari Chamanlal v. CIT [1996] 217 ITR 6451(Bom.), Rajaram & Co. v. CIT [1992] 193 ITR 614 (Guj.) and Beena Metals v. CIT [1999] 240 ITR 2222 (Ker.).
14. In the present case, we have to examine as to whether the claim made under section 35D of the Act was bogus or it was a bona fide claim. The assessee pleaded bona fide, as according to it, it was based on the opinion of the Chartered Accountant. Learned counsel for the revenue, however, submitted that a bare reading of section 35D would reveal even to a layman that there was no scope for getting benefit of those provisions in respect of expenses incurred in connection with the public issue of shares such as underwriting commission, brokerage and other charges etc., inasmuch as certain expenses are allowable only when they are incurred with the expansion of assessee's industrial undertakings or in 6 ITA nos.4579 & 4580 /Del/2010 connection with his setting up of a new industrial undertaking or industrial unit whereas the assessee is a finance company.
15. We are in agreement with the aforesaid submission of learned counsel for the revenue. We fail to understand as to how the Chartered Accountants who are supposed to be expert in tax laws, could give such an opinion having regard to the plain language of section 35D of the Act. It would be important to note that assessee has nowhere pleaded that return was filed claiming benefit of section 35D of the Act on the basis of the said opinion. What was stated was that in the prospectus it was mentioned that as per the opinion given by the Chartered Accountants, the company would be entitled for relief under section 35D of the Act. Therefore, it is not the case of the assessee that while filing the return it got assistance from the Chartered Accountants who opined that the aforesaid expenses qualify for amortization over a period of 10 years under section 35D of the Act. That apart, when we find that it is not a case where two opinions about the applicability of section 35D were possible. Therefore, it cannot be a case of a bona fide error on the part of the assessee. As has been pointed out above, the relief available under section 35D of the Act to a finance company is ex facie inadmissible as that is confined only to the existing industrial undertaking for their extension or for setting up a new industrial unit. It was, thus, not a 'wrong claim' preferred by the assessee, but is a clear case of 'false claim'. In CIT v. Vidyagauri Natverlal [1999] 238 ITR 91, Gujarat High Court made a distinction between wrong claim as opposed to false claim and held that if the claim is found to be false, the same would attract penalty. We may also take note of the following observations of the Supreme Court in the case of Union of India v. Dharamendra Textile Processors [2008] 306 ITR 2771. In such a case it is difficult to accept the plea that error was bona fide.
ii) Kuttookaran Machine Tools v ACIT(2009) 313 ITR 413(Ker) "The question raised in the appeal is whether the Tribunal is justified in confirming the penalty levied on the assessee under section 271(1)(c) of the Income-tax Act for the assessment year 1989-90. On going through the Tribunal's order and after hearing counsel, we find that the assessee made bogus claims of investment allowance and depreciation in respect of machinery which were not purchased, installed or commissioned during the previous year. The assessee has no case that it had in fact purchased and installed the machinery in respect of which benefits were claimed under the statute. On the other hand, the assessee's case is that this is a mistake committed by the auditor and so much so the assessee is not liable to be subjected to penalty. In support of his contention, counsel also relied on the decision of the Supreme Court in T. Ashok Pai v. CIT [2007] 292 ITR
11. We do not find any merit in the case because benefits are claimed 7 ITA nos.4579 & 4580 /Del/2010 in the return. Though prepared by the auditor for1the assessee, it was for the assessee to ensure that wrong claims are not made by the practitioner or auditor. We, therefore, reject the assessee's case of immunity from penalty. Since the penalty levied is minimum leviable under section 271(1)(c) of the Act there is no scope for reduction in quantum of penalty also. The appeal, therefore, fails and is dismissed."
iii) UOI v Dharmendra Textile Processors(2008) 306 IT 277(SC) "The Explanations appended to section 271(1)(c) of the Income-tax Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. ........................ Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under section 276C of the Income-tax Act."
12. The penalty u/s 271(1)(c) imposed is the minimum imposable in this case. Considering the facts, the penalty u/s 271(1)© is justified and is upheld"
5.1 Similarly, in the case of HCIL Kalindee Arsspl (JV), the ld. CIT(A) upheld the penalty of ``23,02,665/-.
6. These assessees are now in appeal before us against the aforesaid findings of learned CIT(A). At the outset, the ld. AR on behalf of the assessee while referring to decision dated 13th September,2010 of the Hon'ble Jurisdictional High Court in CIT Vs. Dharam Pal Prem Chand Ltd. in ITA no.912/2010 contended that levy of penalty is unjustified, there being no concealment or furnishing of inaccurate particulars thereof. The ld. AR pointed out that amendment to provisions of section 80IA of the Act vide Finance Act ,2007 w.e.f dated 01.04.2000 was made just before the date of filing of the return and escaped the attention of the assessees and the auditors. He added that deduction having been claimed on the strength of prescribed report of the CA in terms of provisions of section 80IA(7) of the Act, penalty imposed may be cancelled. On the other hand, the ld. DR supported the findings of the ld. CIT(A).
7. We have heard both the parties and gone through the facts of the case as also the decision cited by the ld. AR. As is apparent from the facts of the aforesaid case, the assessee claimed deduction u/s 80IA of the Act in their return 8 ITA nos.4579 & 4580 /Del/2010 filed on 01.11.2007 even when the explanation below section 80IA(13) of the Act was inserted by the Finance Act ,2007 w.e.f. 01.04.2000 while the Finance bill received the assent of the President on 11th May, 2007. Indisputably, the deduction u/s 80IA was claimed on the basis of report of the CA in form no. 10CCB. The ld. CIT(A) in the impugned order concluded that claim being not bonafide after the insertion of explanation below section 80IA(13) of the Act, levy of penalty was justified. On the other hand, the ld. AR contended that the said explanation escaped the attention of not only the assessee but even the auditors, submitting report in form no. 10CCB. Immediately when the AO referred to the said explanation, the assessee accepted the view of the AO and paid tax accordingly. W e find that it is not a case where the assessee has not disclosed full details at the time of assessment. In terms of provisions of sec. 80IA(7) of the Act, the deduction under the said section is not admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of the said section. The assessee, in the instant case, merely made a claim for the deduction in terms of the said certificate. If in the process, the explanation below section 80IA(13) escaped the attention of the Chartered Accountant, the assessee could not be faulted.. Not even a whisper has been made in the penalty order as to which specific particulars were furnished inaccurate or were concealed. In the case of Escorts Finance Ltd.(supra), relied upon by the ld. CIT(A), the levy of penalty was upheld since claim for deduction u/s 35D of the Act was found to be exfacie bogus in case of a finance company and the assessee nowhere pleaded that return was filed claiming benefit of section 35D of the Act on the basis of the opinion of a chartered accountant. Likewise in Kuttookaram Machime Tools(Supra) ,bogus 9 ITA nos.4579 & 4580 /Del/2010 claim for investment allowance and depreciation were made in respect of machinery which was not even purchased. Such are not the facts in the case before us. In the instant case , the AO has nowhere even alluded in the assessment order that the claim for deduction u/s 80IA was exfacie bogus or not made on the basis of a certificate of a Chartered accountant. Thus, reliance by the ld. CIT(A) on the these two decisions is totally misplaced.
7.1 Moreover, the expression 'has concealed the particulars of income' and 'has furnished inaccurate particulars of income' have not been defined either in section 271 or elsewhere in the Act. However, notwithstanding the difference in the two circumstances, it is now well established that they lead to the same effect namely, keeping off a certain portion of the income from the return. According to Law Lexicon, the word "conceal" means:
"to hide or keep secret. The word 'conceal' is con+celare which implies to hide. It means to hide or withdraw from observation; to cover or keep from sight; to prevent the discovery of ; to withhold knowledge of. The offence of concealment is, thus, a direct attempt to hide an item of income or a portion thereof from the knowledge of the income- tax authorities."
In W ebster's Dictionary, "inaccurate" has been defined as :
"not accurate, not exact or correct; not according to truth; erroneous ; as an inaccurate statement, copy or transcript.".
7.2. The penalty u/s 271(1)(c) of the Act is leviable if the AO is satisfied in the course of any proceedings under this Act that any person has concealed the particulars of his income or furnished inaccurate particulars of such income. It is well settled that assessment proceedings and penalty proceedings are separate and distinct and as held by Hon'ble Supreme Court in the case of Ananthraman Veerasinghaiah & Co. Vs. CIT, 123 ITR 457, the findings in the assessment proceedings cannot be regarded as 10 ITA nos.4579 & 4580 /Del/2010 conclusive for the purposes of the penalty proceedings. It is also well settled that the criterion and yardsticks for the purpose of imposing penalty u/s 271(1)(c) of the Act are different than those applied for making or confirming the additions. It is, therefore, necessary to reappreciate and reconsider the matter so as to find out as to whether the addition or disallowance made in the quantum proceedings actually represents the concealment on the part of the assessee as envisaged in sec. 271(1 )(c) of the Act and whether it is a fit case to impose the penalty by invoking the said provisions. The provisions of section 271(1)(c) of the Act stipulate that if the Assessing Officer or the CIT(Appeals) or the Commissioner, in the course of proceedings under this Act, is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars thereof , he may direct that such person shall pay by way of penalty a sum which shall not be less than but which shall not exceed three times the amount of tax sought to be evaded by a reason of the concealment of particulars of his income. Explanation 1 to section 271(1)(c) of the Act mentions that where in respect of any facts material to the computation of the total income of any person under the Act, such person fails to offer an explanation or offers an explanation which is found by the AO or the CIT (Appeals) or the Commissioner to be false, or such person offers an explanation which he is not able to substantiate and f ails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then the amount added or disallowed in computing the total income of such person as a result thereof shall for the purpose of clause (c) of section 271(1), be deemed to represent the income in respect of which particulars have been concealed. In other words, the necessary ingredients for attracting Explanation 1 to section 271(1)(c) are that 11 ITA nos.4579 & 4580 /Del/2010
(i) the person fails to offer the explanation, or
(ii) he offers the explanation which is found by the AO or the CIT (Appeals) or the Commissioner to be false, or
(iii) the person offers explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same have been disclosed by him.
7.3 If the case of any assessee falls in any of these three categories, then the deeming provision provided in Explanation 1 to section 271(1)(c) come into play, and the amount added or disallowed in computing the total income shall be considered as the income in respect of which particulars have been concealed, for the purposes of clause (c) of section 271(1), and the penalty follows. On the other hand, if the assessee is able to offer an explanation, which is not found by the authorities to be false, and assessee has been able to prove that such explanation is bona fide and that all the facts relating to the same have been disclosed by him, the assessee shall be out of the clutches of explanation 1 to section 271(1)(c) of the Act, and in that case, the penalty shall not be imposed. Hon'ble Supreme Court in the case of Dilip N. Shroff v. Jt. CIT [2007] 210 CTR (SC) 228 : [2007] 291 ITR 519 (SC) while considering the scope of the provisions u/s 271(1)( c) of the Act observed in the following terms:
"The legal history of section 271(1)(c) of the Act traced from the 1922 Act prima facie shows that the Explanations were applicable to both the parts. However, each case must be considered on its own facts. The role of the Explanation having regard to the principle of statutory interpretation must be borne in mind before interpreting the aforementioned provisions. Clause (c) of sub-section (1) of section 271 categorically states that the penalty would be leviable if the assessee conceals the particulars of his income or furnishes inaccurate particulars thereof. By reason of such concealment or furnishing of inaccurate particulars alone, the assessee does not ipso facto become liable for penalty. Imposition of 12 ITA nos.4579 & 4580 /Del/2010 penalty is not automatic. Levy of penalty is not only discretionary in nature but such discretion is required to be exercised on the part of the Assessing Officer keeping the relevant factors in mind. Some of those factors apart from being inherent in the nature of penalty proceedings as has been noticed in some of the decisions of this court, inheres on the face of the statutory provisions. Penalty proceedings are not to be initiated, as has been noticed by the Wanchoo Committee, only to harass the assessee. The approach of the Assessing Officer in this behalf must be fair and objective. ....................................................................................... The term "inaccurate particulars" is not defined. Furnishing of an assessment of value of the property may not by itself be furnishing of inaccurate particulars. Even if the Explanations are taken recourse to, a finding has to be arrived at having regard to clause (A) of Explanation 1 that the Assessing Officer is required to arrive at a finding that the explanation offered by an assessee, in the event he offers one, was false. He must be found to have failed to prove that such explanation is not only not bona fide but all the facts relating to the same and material to the income were not disclosed by him. Thus, apart from his explanation being not bona fide, it should have been found as of fact that he has not disclosed all the facts which was material to the computation of his income."
7.4 In the light of aforesaid observations of the Hon'ble Apex Court , what is to be seen in the instant case, is whether the claim for deduction u/s 80IA of the Act, on the basis of certificate of the accountant, made by the assessee was bona-fide and whether all the material facts relevant thereto have been furnished and once it is so established, the assessee cannot be held liable for concealment penalty u/s 271(l)(c) of the Act. The Assessing Officer has not been able to establish that the claim of the assessee for deduction under section 80IA of the Act was not bona fide. A mere rejection of the claim of the assessee by relying on different interpretations does not amount to concealment of the particulars of income or furnishing inaccurate particulars thereof by the assessee. Hon'ble Apex Court in CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158/ 189 Taxman 322, after considering various decisions including Dilip N. 13 ITA nos.4579 & 4580 /Del/2010 Shroff v. Jt. CIT [2007] 291 ITR 519/ 161 Taxman 218 (SC) and Union of India v. Dharmendra Textile Processors [2008] 306 ITR 277 / 174 Taxman 571 (SC) concluded that a mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. Following this decision, Hon'ble jurisdictional High Court in M/S Dharmpal Premchand(Supra) upheld the cancellation of penalty levied in relation to incorrect claim of deduction u/s 80IA & 80IB of the Act. Mere disallowance of a claim will not amount to filing of inaccurate particulars of income. It can at best be a "wrong claim" not "a false claim". In such circumstances, Hon'ble Delhi High Court held in the case of Commissioner Of Income-Tax.vs Bacardi Martini India Limited.,288 ITR 585(Del) that no penalty was leviable. In the case under consideration, there is nothing to suggest that the assessee furnished any inaccurate particulars or concealed the particulars . Admittedly, the claim for deduction u/s 80IA was duly supported by the certificate of the chartered accountant in the prescribed form. In these circumstances, no fault can be found with the claim of the assessee that it had claimed the deduction in a bona fide manner. In somewhat similar circumstances. Hon'ble Punjab and Haryana High Court cancelled the penalty levied in respect of disallowance of deduction u/s.80I in the case of CIT Vs. SD Rice Mills, 275 ITR 206 (P&H). Similar view was taken in ACIT vs. Arisudana Spinning Mills Ltd.,19 DTR 1(Chd.) and Model Footwear P Ltd. vs. ITO,124 ITD 353(Del.). Moreover, mere fact that the report prepared by the CA in form 10CCB was not in accordance with the provisions of section 80IA(7) of the Act, was not enough to hold that the mistake was not bona fide. This view is supported by the decision in the case of CIT Vs. Deep Tools Pvt. Ltd., 274 ITR 603 (P&H),where in also levy of penalty was held to be unjustified. In CIT vs. Caplin Point Laboratories Ltd., 293 ITR 524(Mad.),Hon'ble High Court while 14 ITA nos.4579 & 4580 /Del/2010 adjudicating the levy of penalty in relation to incorrect claim for deduction u/s 80HHC & 80I of the Act held in the light of aforesaid decision of the Hon'ble Apex Court in Dilip N. Shroff(supra) that a mere rejection of the claim of the assessee by relying on different interpretations does not amount to concealment of the particulars of income or furnishing inaccurate particulars of income by the assessee.
7.5. In view of the foregoing, we are of the opinion that mere erroneous claim in the absence of any concealment or furnishing of inaccurate particulars, is no ground for levying penalty, especially when there is nothing on record to show that any material particulars were concealed or furnished inaccurate . In these circumstances, we are of the opinion that levy of penalty is not justified. Consequently, we have no hesitation in vacating the findings of the ld. CIT(A) in respect of levy penalty in relation to claim for deduction u/s 80IA of the Act. Accordingly, penalty imposed by the AO is cancelled in the case of these two assessees. Consequently, ground raised in these two appeals is allowed.
8. In the result, both these appeals are allowed.
Order pronounced in Open Court
Sd/- Sd/-
(C.L. Sethi) (A.N. Pahuja)
(Judicial Member) (Accountant Member)
NS
Copy of the Order forwarded to:-
1. AC.I.T., Central Circle-38 (1), New Delhi.
2. M/s HCIL ARSSPL TRIVENI (JV) & M/s HCIL KALINDEE
ARSSPL (JV), 113-A, Kamla Nagar, Delhi-7
3. CIT(A)-XXVIII, New Delhi.
4. CIT concerned.
5. DR, ITAT,'C' Bench, New Delhi
15 ITA nos.4579 & 4580 /Del/2010
6. Guard File.
BY ORDER,
Deputy/Asstt.Registrar
ITAT, Delhi