COMMISSIONER OF INCOME TAX , KARNAL vs. M/S FLORA EXPORTS, PANIPAT

ITA/691/2010HC Punjab & HaryanaPHHC01093652201014 December 2010Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), New Delhi, dated January 28, 2010. The ITAT had deleted a penalty imposed under Section 271(1)(c) of the Act. The penalty was levied on the deduction claimed by the assessee, M/s Flora Exports, under Section 80IB on export incentives for the Assessment Year 2004-05. The Revenue's appeal was dismissed by the High Court.

What did the High Court hold?

The High Court dismissed the appeal preferred by the Revenue. The Court noted that the learned counsel for the Revenue did not dispute that the matter was covered against the Revenue by a previous order of the same Court dated July 28, 2010, in I.T.A. No. 225 of 2010, CIT v. M/s Raj Overseas. Therefore, the appeal was dismissed in light of this precedent. The specific reasoning of the ITAT regarding the deletion of penalty, which was the subject of the substantial questions of law, was not elaborated upon by the High Court as the appeal was decided on the basis of the binding precedent. No issue was left undecided.

What were the issues?

1. Whether the ITAT was correct in deleting the penalty under Section 271(1)(c) by holding that there was no deliberate furnishing of inaccurate particulars by the assessee, considering the Supreme Court decision in Sterling Foods Vs. CIT (237 ITR 579) which disallowed deduction under Chapter VIA on export incentives, was available at the time of filing the return for AY 2004-05? (Question of law turning on Section 271(1)(c) and Section 80IB). 2. Whether the ITAT's decision to delete the penalty under Section 271(1)(c) is justified in light of the Supreme Court decision in Liberty India Vs. CIT (317 ITR 218), which reaffirmed the non-allowability of 80-IB deduction on export incentives? (Question of law turning on Section 271(1)(c) and Section 80IB). 3. Whether the ITAT's confirmation of the CIT(A)'s order quashing the penalty under Section 271(1)(c) on the ground of no deliberate concealment is justified, given the Supreme Court decision in Dharmendra Textile Processors and others (306 ITR 277), where the assessee's unsubstantiated explanation should be deemed concealment under Explanation 1(b) to Section 271(1)(c)? (Question of law turning on Section 271(1)(c)). Revenue's contention: The assessee had furnished inaccurate particulars by claiming deduction under Section 80IB on export incentives, despite the Supreme Court judgments in Sterling Foods and Liberty India being available. This should be considered deliberate concealment. Assessee's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 271(1)(c),Section 80IB

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.691 of 2010 Date of decision: 14.12.2010 The Commissioner of Income Tax. -----Appellant.

Vs. M/s Flora Exports. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Yogesh Putney, Sr.Standing counsel for the Revenue. --- ADARSH KUMAR GOEL, J.

This appeal has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, New Delhi dated 28.1.2010 in I.T.A. No.4147/DEL/2009 proposing to raise following substantial questions of law:- “i)

Whether on the facts, and in the circumstances of the case, the Ld. Income Tax Appellate Tribunal was right in law in deleting the penalty imposed under Section 271(1)(c) on the amount of deduction claimed under Section 80IB on export incentives by holding that there was no deliberate furnishing of inaccurate particulars by the assessee, given the fact that the decision of the Hon'ble Supreme Court in Sterling the Act on export incentive

The order continues below.

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