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Facts
The assessee filed an appeal against a penalty levied under Section 271(1)(c) for AY 2012-13. The penalty was based on a disallowance of deduction under Section 80IB(10) related to three specific flats, which were allotted and part-paid before a new clause 'f' was inserted into Section 80IB(10).
Held
The Tribunal held that since the allotment and part-payment for the three flats occurred prior to the insertion of Clause 'f' of Section 80IB(10), and these flats were allotted to different family members, there was no concealment or inaccurate particulars of income. Therefore, penalty could not be levied.
Key Issues
Whether penalty under Section 271(1)(c) is leviable when the disallowance under Section 80IB(10) pertains to transactions predating the insertion of a relevant clause, and no concealment or inaccurate particulars are established.
Sections Cited
271(1)(c), 80IB(10)
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Income Tax Appellate Tribunal, ‘D’ BENCH
आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 12/06/2024 passed by NFAC, Delhi in relation to the penalty proceedings u/s. 271(1)(c) for the A.Y.2012-13.
D.V. Realtors 2. The assessee is mainly aggrieved by levy of penalty of Rs.11,60,640/- u/s.271(1)(c) on disallowance made u/s.80IB(10). The reason for disallowance of the ld. AO was that the three flats bearing No.701, 704 and 705 were allotted to one individual and his family members and thereby following the provisions of Section 80IB(10)(f) entire claim has to be disallowed; and secondly, the built-up area for 18 flats has exceeded the prescribed limit violating the provisions of Section 80IB(10)(c). The ld. CIT(A) in his detailed order held that only proportionate disallowance can be made with respect to the three flats only and the entire deduction u/s.80IB(10) cannot be disallowed and therefore, he restricted the disallowance of deduction. In so far as observation regarding 18 flats exceeding the area of per flat more than 1000 sq. ft. u/s.80IB(10)(c), after calling for remand report, ld. CIT(A) gave a categorical finding that none of the flats had exceeded limit of 1000 sq. ft, and there is no such violation. It is also brought on record that the Revenue’s appeal filed before the Tribunal has been dismissed after discussing each and every issue raised by the department.
Now penalty has been levied on part disallowance of Rs.11,60,640/-. The contention of the assessee was that clause ‘f’ of Section 80IB (10) was inserted w.e.f. 19/08/2009 and assessee had received all the payments in respect of three flats had also issued allotment letters prior to the insertion of this provision. These flats were allotted to three members of family separately and therefore, assessee was under a bonafide belief that there is no breach of condition as at that time there was no D.V. Realtors such provision under the Act. Accordingly, it has been contended that in these facts, no penalty should be levied.
After hearing both the parties and on perusal of the facts and material on record, we find that all the allegations made by the ld. AO to disallow the claim of deduction u/s.80IB(10) has been dealt and reversed by the ld. CIT(A) and the Tribunal. The only issue was proportionate disallowance with respect to three flats on which penalty has been levied. Once it has been brought on record that these flats were allotted and part payment was received prior to insertion of Clause ‘f’ of Section 80IB(10) as these flats were allotted to three different members of the family then, it cannot be held that assessee had concealed any particulars of income or there was any inaccurate particulars of income. Thus, penalty cannot be levied on these facts and accordingly, same is deleted.
In the result, appeal of the assessee is allowed. Order pronounced on 28th February, 2025.