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2. Facts ,in brief, as per, relevant orders for the AY 2003-04 are that return declaring income of ``16,75,00,900/- filed on 01.12.2003 by the assessee, carrying on the business of software development and BPO Services, after being processed on 19.03.2004 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 u/s 143(2) of the Act ,issued on 11th October, 2004. During the course of assessment proceedings, the Assessing Officer (A.O. in short) noticed that the assessee, inter alia, did not receive or bring in convertible foreign exchange into India within the stipulated time on account of exports made by it to the extent of `13,16,087/- in Leela Unit & ` 25,08,077/- in GNR unit. Accordingly, the AO reduced these amounts from the export turnover while computing deduction u/s 80HHE & 10A of the Act respectively. Inter alia, penalty proceedings u/s 271(1)(c ) of the Act were also initiated. On appeal, the ground relating to non receipt of convertible foreign exchange into India within the stipulated time on account of exports, was not pressed before the ld. CIT(A). Subsequently, in response to a show cause notice before levy of penalty u/s 271(1)(c) of the Act, the assessee replied that they had mentioned the fact of unrealized export proceeds in annexure-A to form 10CCAF & 56F and on their application, seeking extension of time ,amounts were subsequently realized. Accordingly, it was argued that all facts relating to unrealized export proceeds having been disclosed ,no penalty could be imposed. However, the AO did not accept the explanation of the 3 ITA nos.861&862/Del./2011 assessee and imposed a penalty of `10 lacs on the tax sought to be evaded on the income of `12,48,547/- on the ground that the assessee, a well established company having the benefit of best tax advisors and consultants, concealed the particulars of its income . It was further mentioned that the if the case of the assessee was not selected for scrutiny or escaped the eyes of the AO, the assessee would have gained huge undue benefit. Inter alia, the AO referred to decision in Union of India v. Dharmendra Textile Processors [2008] 306 ITR 277 / 174 Taxman 571 (SC).

4 ITA nos.861&862/Del./2011 evaded on the income of `1,46,,29,547/- on the ground that the assessee,a well established company having the benefit of best tax advisors and consultants, concealed the particulars of its income. It was further mentioned that the if the case of the assessee was not selected for scrutiny or escaped the eyes of the AO, the assessee would have gained huge undue benefit. Inter alia, the AO referred to decision in Union of India v. Dharmendra Textile Processors [2008] 306 ITR 277 / 174 Taxman 571 (SC).

7.3 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 10A and 80HHE 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 sections 10A and 80HHE of the Act was not bona fide or that any specific particulars were concealed or furnished inaccurate. Likewise mere disallowance of ``6,83,493/- in terms of provisions of sec. 14A of the Act or disallowance of ``10,000/- on account of penalty on the basis of tax audit report, does not ,in our view, attract levy of penalty. 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 12 ITA nos.861&862/Del./2011 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. 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. 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 10A & 80HHE was duly supported by the certificate of the chartered accountant in the prescribed form while the factum of unrealized export sale proceeds was mentioned in the said certificate. In this view of the matter, no fault can be found with the claim of the assessee that it had claimed the deduction in a bona fide manner. Moreover, mere fact that the report prepared by the CA was not in accordance with the relevant provisions 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..