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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI MAHAVIR SINGH, JM & SHRI RAJESH KUMAR, AM
O R D E R PER RAJESH KUMAR, A. M: This appeal by the Assessee is directed against the order dated 1.12.2015 of Commissioner of Income Tax (Appeals)- 30, Mumbai (Hereinafter called as the CIT(A) for assessment year 2011-12.
The facts in brief are that the assessment was completed u/s 143(3) assessing the income of the assessee at Rs. 11,46,990/- as against the returned income of Rs.6,35,503/- and penalty proceedings were initiated u/s 271(1)( c ) of the Income Tax Act, 1961 Act for concealing the particulars of income and furnishing in accurate particulars of income. The assessee, a proprietor of M/S
2 853/Mum/2016 Global Solutions, was engaged in the business of export of software and ,during the year under consideration, had a turnover of Rs. 73,96,959/- including export turnover of Rs.72,35,001/- and accordingly claimed deduction u/s 10A of the Act at Rs. 44,46,150/- by filing form 56F. The AO during the course of assessment proceedings found that the interest on FDR of Rs. 1,14,768/- and interest on loans Rs. 3,72,390/- were treated as part of profit of export business and thus claimed excess deduction u/s 10A. However during the course of assessment proceedings ,the assessee revised the claim u/s 10A by filing revised workings of claim u/s 10A of the Act by submitting that it was an inadvertent and unintentional mistake occurred. In the revised working the assessee declared the income at Rs.11,11,900/- as against the original returned income of Rs. 6,35,500/- without revising the return of income. The AO after giving show cause on 01.08.2014 and after considering the reply of the assessee as filed vide letter dated 14.08.2014, as incorporated in para 4 of the penalty order, rejected the contention of the assessee on various grounds and relied upon various decisions and case laws as incorporated in para 5 of the penalty order and ultimately imposed a penalty of Rs.1,41,107/- for furnishing inaccurate particulars of income u/s 271(1)( c ) of the Act.
Aggrieved by the order of AO, the assessee filed an appeal before CIT(A) who also dismissed the appeal of the assessee by considering and rejecting the 3 853/Mum/2016 submissions of the assessee which has been incorporated at para 4 of the appeal order and hence the assessee is in appeal before us.
The ld AR at the outset, while placing before the us the copy of judgment in the case of CIT V Jubilant Enpro Pvt Ltd(Del) in dated 28.09.2010, vehemently submitted that the case of the assessee is fully covered by the said judgment of the Delhi High Court and in view the said decisions the penalty as imposed by AO and confirmed by CIT(A) is prayed to be deleted. The ld DR on the other hand relied on the orders of authorities below.
We have considered the rival submissions and perused the relevant materials on records. Upon careful perusal of the decision in the case of CIT V Jubilant Enpro Pvt Ltd (Supra), we find that an identical issue has been decided by the Delhi High Court in favour of the assessee by holding that penalty u/s 271(1( c ) of the Act was not leviable in the case of disallowance of interest on FDR u/s 10A. The relevant extracts of the said decision are as under:- “12. The issue whether such disallowable item of interest under section 10A of the Income Tax Act, 1961 calls for penalty under section 271(1)(c) of the income Tax Act, 1961 came up for consideration before the Tribunal in the case of ACIT Vs. M/s. HCL Technologies etc. and ITAT, „C‟ Bench, Delhi vide a consolidated order dated 31st March, 2009 passed in ITA No.1445/Del/2008 assessment year 1998-99, ITA No.1320/Del/2008 assessment year 2003-04 and ITA No.1446/Del/2008 assessment year 2003-04 while considering a number of disallowable item under section 10A for imposition of penalty under section 271(1)(c)of the Income Tax Act, 1961, in which one of the temps also was disallowance of interest received on FDRs under section 10A, held that penalty under section 4 853/Mum/2016
271(1)(c) of the Income Tax Act, 1961 was not leviable, while observing as under:- "3. .........The case of the assessee before us and before the Ld. CIT(A) was that the claim for deduction under section 10A on the aforesaid items was made bonafidely, as there were differing decisions of the Tribunal in the matter. Therefore, if subsequent decision of the Hon‟ble High Court or the Hon‟ble Supreme Court reverses the finding of the Tribunal, then a claim made in consonance with the order of the Tribunal does not lead to an inference of concealment of income. We find that the learned DR was not able to rebut this argument. We also find that the learned CIT(A) has specifically held that all the facts relating to computation of income had been disclosed and, thereafter specific claims for deduction were made. In such circumstances, we are of the view that decision in the case of Dharmendra Textile Processors & Others (supra) does not support the case of the revenue as the decision is that the matter has to be decided in the light of statutory language contained in section 271(1)(c) and Explanation offered by the assessee could not be said to be mala fide. Therefore, we are of the view that the learned CIT(A) was right in deleting the penalty."
In the instant case, the assessee having disclosed all the particulars qua the interest on FDRs and loans in the claim made u/s 10A of the Act and the facts of the assessee’s being same as in the case of CIT V Jubilant Enpro Pvt Ltd (Supra) and are squarely covered by the ratio laid down in the said decision. We, therefore, respectfully following the ratio laid down in above decision direct the AO to delete the penalty as imposed u/s 271(1)( c ) of the Act.