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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN
This appeal by the Revenue is directed against order dated 3rd March 2016, passed by the learned Commissioner (Appeals)–21, Mumbai, for the assessment year 2007–08.
Brief facts are, the assessee a company is engaged in the business of development and construction. For the assessment year under dispute, the assessee filed its return of income on 31st October 2007, declaring nil income after claiming deduction under section 80IB(10) of the Act. In the course of assessment proceedings, the 2 M/s. Mukon Constructions Pvt. Ltd.
Assessing Officer while examining assessee’s claim of deduction under section 80IB(10) called for various details and explanation of the assessee with regard to validity of deduction claimed and ultimately held that assessee’s claim of deduction under section 80IB(10) is not allowable. As a result of disallowance of assessee’s claim of deduction under section 80IB(10), the total income was determined at ` 4,71,15,700. On the basis of the disallowance of deduction claimed under section 80IB(10), the Assessing Officer initiated proceedings for imposition of penalty under section 271(1)(c) of the Act and ultimately imposed penalty under the said provisions alleging furnishing of inaccurate particulars of income. The penalty order passed by the Assessing Officer was challenged by way of an appeal before the learned Commissioner (Appeals).
The learned Commissioner (Appeals) noticing that similar disallowance made in assessment year 2004–05, though, on different reasoning was subsequently allowed by the appellate authority deleted the penalty imposed.
At the very out set, the learned Authorised Representative submitted before us that while deciding assessee’s quantum appeal, the Tribunal has directed the Assessing Officer to allow assessee’s claim of deduction under section 80IB(10) of the Act. She, therefore,
3 M/s. Mukon Constructions Pvt. Ltd. submitted that in view of the aforesaid factual position, penalty under section 271(1)(c) cannot be imposed.
Learned Departmental Representative has agreed to the aforesaid factual position.
We have heard rival submissions and perused material available on record. Undisputedly, the penalty under section 271(1)(c) has been imposed for the impugned assessment year purely on the basis of addition made on account of disallowance of assessee’s claim of deduction under section 80IB(10). However, as brought to our notice by the learned Authorised Representative while deciding assessee’s quantum appeal for the impugned assessment year, the Tribunal in ITA no.5538/Mum./2011 dated 15th March 2017, has directed the Assessing Officer to allow assessee’s claim of deduction under section 80IB(10). That being the case, when the addition on the basis of which penalty under section 271(1)(c) was imposed has lost its existence penalty imposed under section 271(1)(c) cannot survive. In view of the aforesaid, we uphold the decision of the learned Commissioner (Appeals) in deleting the penalty imposed under section 271(1)(c) of the Act. Grounds raised are dismissed.
4 M/s. Mukon Constructions Pvt. Ltd.
In the result, Revenue’s appeal is dismissed. Order pronounced in the open Court on 21.02.2018