UPS INVERTER.COM,PARWANOO vs. DCIT, CIRCLE (NOW ITO), PARWANOO

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ITA 529/CHANDI/2023Status: DisposedITAT Chandigarh09 December 2024AY 2012-13Bench: SHRI SANJAY GARG (Judicial Member)4 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the issue regarding deduction under Section 80IC on substantial expansion was debatable and decided in favor of the assessee by the Supreme Court. Therefore, the penalty was unjustified.

What were the facts?

The assessee claimed deduction under Section 80IC for substantial expansion of its manufacturing unit. The Assessing Officer denied this deduction and imposed a penalty under Section 271(1)(c).

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the deduction claimed under Section 80IC on account of substantial expansion was a debatable issue finally decided in favor of the assessee.

Which sections of the Income-tax Act were involved?

Section 80IC,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

(PHYSICAL HEARING) �नधा�रतीक�ओरसे/Assessee by : Shri. Manoj Kumar, C.A. राज�वक�ओरसे/ Revenue by : Dr. Ranjeet Kaur, Sr. D.R. सुनवाईक�तार�ख/Date of Hearing : 13.11.2024 उदघोषणाक�तार�ख/Date of Pronouncement : 09.12.2024 आदेश/Order The present appeal has been preferred by the assessee against the order passed by the ld. Commissioner of Income Tax, Appeal National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “Ld. CIT(A)] dated 20.06.2023 for the Assessment Year: 2012-13. The assessee in this appeal is aggrieved by the action of the ld. CIT(A) in confirming the penalty levied by the Assessing Officer u/s 271(1)(c) of the Income Tax Act, 1961.

UPS Inverter v. Dy. CIT 2 2. The brief facts of the case are that the assessee claimed deduction u/s 80IC of the Income Tax Act on account of substantial expansion of the manufacturing unit. However, the same was denied by the Assessing Officer (hereinafter referred to as the “AO”) on the technical ground that once a deduction has been claimed by the manufacturing unit for first 5 years, then subsequently deduction @100% cannot be claimed on account of substantial expansion holding that there cannot be two ‘initial assessment years’ for calculating the percentage of deduction. The Ld. AO imposed the penalty u/s. 271(1)(c) of the Act, in respect of the aforesaid disallowance made by him.

3.

The issue relating to claim of deduction @ 100% u/s. 80IC on substantial expansion travelled up to the Hon’ble Supreme Court in the case of Pr. CIT v. Aarham Softronics 2019-ITOL 73 (SC)-IT- LB. The Hon’ble Supreme Court has decided the issue in favour of the assessee and has held that the assessee is entitled to the deduction u/s 80IC of the Income Tax Act on substantial expansion UPS Inverter v. Dy. CIT 3 @100% and that ‘initial year’ to be taken is the year in which such substantial expansion was undertaken. Since the issue was debatable and which has been finally decided in favour of the assessee and there is no element of furnishing any particulars of income or of concealment of income, therefore, there is no justification for levy of impugned penalty. The same is ordered to be deleted.

4.

In the result, the appeal of the assessee stands allowed.

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