CIT, AAYAKAR BHAWAN, KARNAL vs. M/S OM OVERSEAS, SHIV NAGAR, PANIPAT

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ITA/515/2010HC Punjab & HaryanaPHHC01093457201018 November 2010Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the matter was covered against the Revenue by its own prior order dated July 28, 2010, in I.T.A. No. 225 of 2010, CIT v. M/s Raj Overseas. Consequently, the appeals filed by the Revenue were dismissed. The reasoning behind the dismissal was that the High Court's previous judgment on a similar issue, involving the same legal principles and assessment years, had already decided the matter in favor of the assessee. Therefore, the High Court found no reason to deviate from its earlier decision. No specific findings were made on the individual issues raised by the Revenue, as the appeals were disposed of on the basis of precedent.

What were the facts?

The Commissioner of Income Tax (Revenue) filed two appeals (I.T.A. Nos. 515 and 518 of 2010) under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal (ITAT), New Delhi, dated August 28, 2009. The appeals pertained to assessment year 2004-04 and challenged the deletion of penalty imposed under Section 271(1)(c) of the Act. The penalty was levied on the amount of deduction claimed by the assessee, M/s Om Overseas, under Section 80IB on export incentives. The Revenue argued that the assessee had deliberately furnished inaccurate particulars by claiming this deduction, especially in light of Supreme Court decisions disallowing such claims.

What were the issues?

1. Whether, on the facts and in the circumstances, the ITAT 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, holding there was no deliberate furnishing of inaccurate particulars, given the Supreme Court decision in Sterling Foods Vs. CIT (237 ITR 579) which disallowed such claims? (Assessee's contention: No deliberate furnishing of inaccurate particulars. Revenue's contention: Assessee was aware of the Sterling Foods decision and deliberately claimed the deduction). 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 re-affirmed the non-allowability of 80IB deduction on export incentives? (Revenue's contention: The Liberty India decision supports the disallowance and thus the penalty. Assessee's contention: Not recorded). 3. Whether the ITAT's decision quashing the penalty order on the ground of no deliberate concealment is justified in light of the Supreme Court decision in Dharmendra Textile Processors and others (306 ITR 277), where an unsubstantiated explanation should be taken as deemed concealment under Explanation 1(B) of Section 271(1)(c)? (Revenue's contention: Assessee's explanation was unsubstantiated and should be deemed concealment. Assessee's contention: Not recorded).

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.515 of 2010 & connected case being I.T.A. No.518 of 2010 Date of decision: 18.11.2010 The Commissioner of Income Tax. -----Appellant. Vs. M/s Om Overseas. -----Respondents CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Yogesh Putney, Sr. Standing Counsel for the appellant. --- ADARSH KUMAR GOEL, J.

This order will dispose of I.T.A. Nos.515 and 518 of 2010 as both the appeals involve common questions of law.

In I.T.A. No.515 of 2010 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 28.8.2009 in I.T.A. No.56/DEL/2009 for the assessment year 2004-04 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 u/s 271(1) (c) on the amount of deduction claimed u/s 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 Foods Vs. CIT dated 15.04.1999 (237 ITR 579) disallowing claim of deduction under Chapter VIA of the Act on export incentives was already available to the assessee at the time of filing of return of income for Asstt. Year 2003-04, and therefore, the assessee was evidently filing inaccurate particulars of income in claiming deduction u/s 80IB on export incentives?” ii) Whether the decision of the Ld. Income Tax Appellate Tribunal to delete the penalty u/s 271(1)(c) of the Act is justified in the light of the decision of the Hon’ble 218), whereby the non-allowability of 80IB deduction on export incentives has been re-affirmed? iii) Whether the decision of the Ld. Income Tax Appellate Tribunal quashing the penalty order u/s 271(1)(c) on the ground that there is no deliberate concealment is justified in the light of the decision of the Hon’ble Apex Court in Dharmendra Textile Processors and others, 306 ITR 277 (SC), whereas the assessee had offered an explanation which could not be substantiated in the light of the Apex Court judgment referred in question No.(1) and ought to have been taken as deemed concealment within Explanation-1 (B) of section 271(1)(c) of the Income Tax Act, 1961?” Learned counsel for the revenue does not dispute that the matter is covered against the revenue by order of this Court dated 28.7.2010 in I.T.A. No.225 of 2010 CIT v. M/s Raj Overseas. Accordingly, the appeals are dismissed.

A photocopy of this order be placed on the file of other connected case. (ADARSH KUMAR GOEL) JUDGE November 18, 2010 (AJAY KUMAR MITTAL) ashwani JUDGE 3

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