C.I.T.UDAIPUR vs. UDAIPUR MAHILA URBAN CO.-OP.BANK LTD.

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ITA/103/2013HC RajasthanRJHC01024788201302 January 20173 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the penalty under Section 271(1)(c) of the Income Tax Act, 1961, was erroneously imposed. The reasoning was that while the assessee initially claimed a deduction, it voluntarily filed a revised return and withdrew the deduction. Crucially, no change in facts was made; the change was solely regarding the entitlement to the deduction, which the assessee corrected on its own. The Court found no force in the Revenue's argument that the assessee knowingly submitted an inaccurate return. Relying on the Supreme Court's decision in CIT Vs. Reliance Petro Products Pvt. Ltd., the High Court concluded that merely claiming a deduction that is later found not to be allowable, and then correcting it in a revised return, does not automatically attract penalty under Section 271(1)(c). The appeal was dismissed as having no merit.

What were the facts?

The assessee, Udaipur Mahila Urban Co.-Op. Bank Ltd., for assessment year 2008-09, initially declared a taxable income of Rs. 2,74,660/- and claimed a deduction of Rs. 76,16,622/- under Section 80P(2)(d) of the Income Tax Act, 1961. Subsequently, on November 30, 2009, a revised return was filed declaring Rs. 78,91,280/- as taxable income, withdrawing the deduction claimed under Section 80P(2)(d). The Assessing Officer treated this as concealment and imposition of inaccurate particulars, leading to a penalty under Section 271(1)(c). The Commissioner of Income Tax (Appeals) allowed the assessee's appeal, and the Income Tax Appellate Tribunal affirmed this decision.

What were the issues?

1. Whether the penalty under Section 271(1)(c) of the Income Tax Act, 1961, was erroneously imposed on the respondent-assessee, when the assessee voluntarily withdrew a claimed deduction in a revised return. The Assessee's contention, as understood from the High Court's analysis, is that the penalty under Section 271(1)(c) was wrongly invoked because the assessee corrected its own mistake by filing a revised return and withdrawing the deduction, without any change in the underlying facts. The Revenue argued that the assessee was aware that the deduction under Section 80P(2)(d) was not applicable, yet submitted an inaccurate return, justifying the Assessing Officer's invocation of Section 271(1)(c). The High Court relied on the Supreme Court's judgment in CIT Vs. Reliance Petro Products Pvt. Ltd.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 80P(2)(d)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 103 / 2013 Commissioner of Income Tax, Udaipur ----Appellant Versus Udaipur Mahila Urban Co.-Op.Bank Ltd, Ashwini Bazar, Udaipur. ----Respondent _____________________________________________________ Counsel For Appellant(s) : Mr. KK Bissa Counsel For Respondent(s) : -- _____________________________________________________ HON'BLE MR. JUSTICE GOVIND MATHUR HON'BLE MR. JUSTICE G.R. MOOLCHANDANI

Judgment 02/01/2017

This appeal is preferred to question correctness of the judgment dated 14.2.2013 passed by the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur affirming the order passed by the learned Commissioner of Income Tax (Appeals) dated 22.5.2012 arriving at the conclusion that the respondent-assessee was erroneously subjected to penalty as per provisions of Section 271(1)(c) of the Income Tax Act, 1961. The factual matrix necessary to be noticed is that the assessee, a Co-operative Bank, for the assessment year 2008-09

(2 of 3) [ITA-103/2013] declared taxable income of Rs.2,74,660/-. While doing so, the assessee claimed deduction as per provisions of Section 80P (2) (d) of the Income Tax Act, 1961 for a sum of Rs.76,16,622/-. A revised return was subsequently filed on 30.11.2009 declaring a sum of Rs.78,91,280/- as taxable income. While submitting revised return, the assessee withdrew deduction claimed as per Section 80P (2)(d) of the Act of 1961. The Assessing Officer treated the same as concealment of a particular income and further submission of inaccurate particulars of income, thus, imposed a penalty. To challenge the same, an appeal was preferred before the Commission of Income Tax (Appeals), that came to be allowed under an order dated 22.5.2012. The Commissioner of Income Tax while accepting the appeal arrived at the conclusion that in light of the judgment of Hon`ble Supreme Court in CIT Vs. Reliance Petro Products Pvt. Ltd., merely because the assessee claimed deduction of interest incurred has not been accepted by the revenue and the penalty under Section 271(1)(c) could have not been attracted. The Income Tax Appellate Tribunal affirmed the finding aforesaid by relying upon the judgment of Hon`ble [ITA-103/2013] Sanjay

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