CIT, KARNAL vs. M/S CONCEPT CREATIONS, PANIPAT

ITA/676/2010HC Punjab & HaryanaPHHC01093635201013 December 2010Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL3 pages
AI SummaryDismissed

What were the facts?

The Revenue has appealed under Section 260-A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT) dated January 29, 2010. The ITAT had deleted a penalty imposed under Section 271(1)(c) of the Act on the respondent assessee, M/s Concept Creation. The penalty was related to a deduction claimed under Section 80IB on export incentives for the assessment year 2004-05. The Revenue's appeal challenges the ITAT's finding that there was no deliberate furnishing of inaccurate particulars by the assessee, especially in light of Supreme Court decisions regarding the non-allowability of such deductions.

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 fairly stated that the matter was covered against the Revenue by this Court's order dated July 28, 2010, in I.T.A. No. 225 of 2010, CIT Vs. M/s Raj Overseas. Therefore, no independent reasoning on the merits of the substantial questions of law was provided by the High Court in this judgment. The operative direction was the dismissal of the appeal. No issue was expressly 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, considering the Supreme Court decision in Sterling Foods Vs. CIT which disallowed deductions under Chapter VIA on export incentives, and the assessee's claim for deduction under Section 80IB on export incentives for AY 2004-05? 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, which reaffirmed the non-allowability of Section 80IB deduction on export incentives? 3. Whether the ITAT's decision to quash the penalty order 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, where an unsubstantiated explanation should be taken as deemed concealment under Explanation 1(b) to Section 271(1)(c)? Assessee's contentions: Not recorded. Revenue's contentions: The assessee deliberately furnished inaccurate particulars by claiming deduction under Section 80IB on export incentives, despite the Supreme Court decisions in Sterling Foods and Liberty India, and the explanation offered by the assessee was unsubstantiated, leading to deemed concealment under Explanation 1(b) of Section 271(1)(c).

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.676 of 2010 Date of decision: 13.12.2010 The Commissioner of Income Tax. -----Appellant. Vs. M/s Concept Creation. -----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.

1.

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 29.1.2010 in I.T.A. No.4451/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 inc

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