ITO, WARD- 2(5), DEHRADUN vs. UTTRAKHAND POORV SAINIK KALYAN NIGAM LTD., DEHRADUN

At the outset, Learned DR submitted that the issue involved in both the appeals are identical except for the year and amounts involved and therefore the submissions made by him for one year would be applicable to the other year also. Learned AR did not controvert the aforesaid submissions of Learned DR. In view of the aforesaid submissions of the DR, we for the sake of convenience proceed to dispose of both the appeals by a consolidated order but for the sake of reference refer to the facts for A.Y. 2011-12.

Brief facts of the case as culled out from the material on record are as under:-

Assessee is a corporation which is established by Government of Uttarakhand for the welfare and economic upliftmen of ex-servicemen. It filed its return of income for A.Y. 2011-12 on 06.07.2014 declaring Nil income after claiming exemption of Rs.6,84,52,829/- u/s 10(26BBB) of the Act. Since the AO was of the opinion that assessee did not fulfill the requirement contemplated u/s 10(26BBB) of the Act, proceeding u/s 148 of the Act was initiated and thereafter assessment order was passed u/s 147 r.w. Section 143(3) of the Act on 25.02.2015 determining the total income at Rs.6,84,52,829/- inter alia by denying the claim of exemption u/s 10(26BBB) of the Act. On such denial of claim of exemption u/s 10(26BBB) of the Act, AO vide penalty order passed u/s 271(1)(c) of the Act dated 08.09.2016 levied the penalty of Rs.2,32,67,120/- for concealment of income/furnishing inaccurate particulars of income.

Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 28.04.2017 in Appeal No.10402/CIT(A)/DDN/2016-17 deleted the penalty levied by AO. Aggrieved by the order of CIT(A), Revenue is now in appeal and has raised the following grounds:

We have heard the rival submissions and perused the material available on record. The issue in the present appeal is with respect to the deletion of penalty levied by AO u/s 271(1)(c) of the Act on the denial of claim of exemption u/s 10(26BBB) of the Act. We find that CIT(A) while deleting the penalty has given a finding that the claim of deduction was not on account of malafide intention to deliberately conceal its income or was a case of furnishing inaccurate particulars, but was in all likelihood, the claim was on account of genuine failure to understand the provisions of Section 10(26BBB) of the Act. He has further held that making of claim of deduction cannot be said to be an act of concealment of income or of furnishing of inaccurate particulars of income. Before us, no material has been placed by Revenue to point out any fallacy in the findings of CIT(A). In such circumstances, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed.

In the result, appeal of the Revenue is dismissed.

As far as A.Y. 2012-13 is concerned, before us, both the parties have submitted that the issue raised in the aforesaid appeals is identical to that of ITA No.4301/Del/2017. We have hereinabove while deciding the appeal and for the reasons stated have dismissed the appeal of the Revenue. We therefore for similar reasons dismiss the appeal of the Revenue. Thus the ground of the Revenue is dismissed.

In the combined result, both the appeals of the Revenue are dismissed.