The Principal Commissioner Of Income Tax Ii vs. Surabhi Homes Pvt. Ltd.

ITA NOS :: 68/2016 & 69/2016

21-03-2017 Shri Sanjay Lal for the appellants. The present appeal under Section 260-A of the Income Tax Act, 1961 arises out of an order passed by Income Tax Appellate Tribunal, Indore Bench, Indore (for short ‘the Tribunal’) on 20.8.2015, whereby an order of Commissioner of Income Tax (Appeals) – II, Bhopal dated 13.2.2014, for the assessment years 2006-07 and 2007-08 was not interfered with. The assessee claimed deduction under section 80IB(10) of the Income Tax Act, 1961 (for short “the Act”). The Assessing Officer rejected the claim of the assessee of such deduction under section 80IB(10) of the Act, for the reason that the assessee does not satisfy the conditions to avail the benefit in the orders of assessment passed on 30.12.2008 and 17.12.2009. The Assessing Officer also ordered for initiating penalty proceedings after dis-allowing the deduction claimed for concealing income and furnishing inaccurate particulars of income. In pursuance to such an order, the Assessing Officer passed an order imposing penalty of Rs.32,35,858/- under section 271(1)(c) of the Income Tax Act, 1961. Such order of imposition of penalty was set aside in appeal by the Commissioner of Income Tax (Appeals), wherein it was held in as under:- “4.10 In the instant case also, there is no finding on record that any details supplied by the appellant in its returns of income for these years are found to be incorrect or false and therefore, there is no question of levying penalty u/s 271(1)(c). A mere making of a claim u/s 80IB(10) which was not allowed by the assessing officer, by itself will not amount to furnishing inaccurate particulars or concealing the income. Therefore, considering the facts and circumstances of the case and legal position of the issue, I am of the considered view that the appellant is not liable for penalty u/s 271(1)(c) for claiming deducting u/s 80IB(10) on the profits derived from a housing project in A.Ys 2006-07 & 2007-08. Accordingly, penalty orders u/s 271(1)(c) for these assessment years imposing penalty of Rs.58,78,458/- & Rs.32,35,858/- respectively are hereby, cancelled.” It is the said order which was not interfered with by the Tribunal in further appeal. Learned counsel for the appellants placed reliance upon an order passed by the Delhi High Court reported as (2010) 327 ITR 510 [Commissioner of Income Tax Vs. Zoom Communication (P) Limited], to contend that if the issue is not debatable then the assessee is liable for penalty. We have heard learned Counsel for the appellant and find that no question of law arises for consideration in the present appeals. In the present case, the Assessing Officer found that the assessee has produced an ‘invalid project approval certificate’. The invalidity was in respect of automatic cancellation of the permission to raise construction of building. Another ground for imposition of penalty was that possession was given to the allottees before obtaining the ‘completion certificate’ which is said to be in gross violation of condition No.7 of the approval certificate. Such facts have been taken into consideration by the Commissioner of Income Tax (Appeals), wherein the Commissioner has recorded the finding referred to above. The fact is that the assessee claimed deduction under section 80IB(10) for the reason that the ‘project approval certificate’ was filed and the possession delivered. May be the technical formality of obtaining completion certificate was not satisfied, but it will not mean that the assessee has claimed incorrect or false deduction. Mere non-satisfaction of a condition of deductions will not mean that the assessee has furnished incorrect return, which will make it liable for penalty. Still further, the Commissioner of Income Tax (Appeals) and the Tribunal have given a finding of fact that there was no incorrect declaration filed by the assessee. Said is a finding of fact, which does not give rise to any substantial question of law. Accordingly, both the appeals are dismissed. (HEMANT GUPTA) CHIEF JUSTICE (S.K. SETH) JUDGE aks