ACIT, NEW DELHI vs. M/S. SANDEN VIKAS INDIA LTD., NEW DELHI

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ITA 4253/DEL/2015Status: DisposedITAT Delhi11 December 2017AY 2010-114 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the penalty under Section 271(1)(c) was not leviable as the expenses were genuinely incurred, and the disapproval by DSIR occurred after the return filing. Therefore, there was no concealment of income or furnishing of inaccurate particulars.

What were the facts?

The assessee claimed a deduction under Section 35(2AB). During assessment, the deduction was reduced as the DSIR approved a lesser amount due to unapproved expenses. The assessee did not appeal the quantum addition.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when deduction under Section 35(2AB) is reduced due to post-filing disapproval of expenses by DSIR.

Which sections of the Income-tax Act were involved?

Section 35(2AB),Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES : D : NEW DELHI

Before: SHRI R.S. SYAL & SHRI C.M. GARG

For Appellant: Shri K. Sampath &, Shri K. Rajkumar, Advocates, Shri Amit Jain, Sr. DR
Hearing: 11.12.2017Pronounced: 11.12.2017

ORDER PER R.S. SYAL, VP:

This appeal by the Revenue arises out of the order passed by the CIT(A) on 29.04.2015 deleting the penalty of Rs.23,83,630/- imposed by the Assessing Officer u/s 271(1)(c) of the Income-tax Act, 1961 (hereinafter called `the Act’) in relation to the assessment year 2010-11.

2.

Briefly stated, the facts of the case are that the assessee claimed deduction u/s 35(2AB) for a sum of Rs.16,83,48,337/-.

During the course of assessment proceedings, it was observed that the DSIR had approved lesser amount and, accordingly, the amount of deduction was reduced by Rs.77,14,000/-. The assessee did not prefer any appeal against the addition made in quantum proceedings. Thereafter, the Assessing Officer imposed penalty u/s 271(1)(c) of the Act in relation to this addition which came to be deleted in the first appeal.

3.

We have heard the parties and perused the relevant material on record. It is observed that the penalty was levied only with reference to the amount of deduction claimed by the assessee u/s 35(2AB). Such reduction in the amount of deduction was effected due to certain expenses incurred by the assessee, which were not approved by the DSIR. It is observed that such expenses were genuinely incurred by the assessee during the previous year relevant to assessment year under consideration and the return was filed on 27.09.2010. The disapproval by the DSIR for such expenses came vide order dated 17th June, 2011. Thus, it shows that the expenses were genuinely incurred by the assessee and the amount of deduction u/s 35(2AB) got lowered because of non-approval of certain expenses and, that too, after the filing of the return by the assessee. Under these circumstances, it cannot be inferred by any standard that the assessee concealed its income or furnished inaccurate particulars of its income. We, therefore, countenance the view taken by the ld. CIT(A).

4.

In the result, the appeal of the Revenue stands dismissed.

Order Pronounced in the open Court on 11.12.2017.

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