COMMISSIONER OF INCOME TAX V. SUSHIL GUPTA

ITA/793/2010

AI Insights

The case involves an appeal by the Commissioner of Income Tax, Karnal against Sushil Gupta, the proprietor of MIs. Aalishan Exports, concerning the deletion of a penalty imposed for claiming an unallowable deduction under Section 80-IB on export incentives. The penalty was initially imposed by the assessing officer but was later deleted by the Commissioner of Income-tax (Appeals) and upheld by the Income Tax Appellate Tribunal. The Revenue's appeal to the High Court challenged the Tribunal's decision, arguing that the assessee had filed inaccurate particulars of income based on a Supreme Court decision that disallowed such deductions. However, the High Court found that the issue was debatable and the assessee's claim was made in good faith, thus upholding the deletion of the penalty.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 719272 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 12-01-2011
• Assessment Year: misc
• Other Referred Cases: Sterling Foods Vs. CIT, Liberty India Vs. CIT, Dharmendra Textile Processor and others Vs. CIT, CIT Vs. Reliance Petroproducts (P) Ltd.
• Laws Referred To: Income-Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: YOGESH PUTNEY
• Keywords: Concealment; Deduction; Export incentive; Inaccurate particulars; Income Tax; Penalty
• Section: 148; 143(3); 271(1)(c); 260A; 143(1)(a); 80-IB; 80-18

Judgement Text

"Income Tax Appeal No. 793 of 2010 1 r? ~ IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Income Tax Appeal No. 793 of 2010 Date of decision: 12.1.2011 The Commissioner of Income Tax Karnal --- Appellant Versus Sushi! Gupta, Prop. of MIs. Aalishan Exports, Panipat. ,\"\"'. ' ' -Ji... .\"\",\"\" ~-J :> --- Respondent CORAM: HON'BlE MR. JUSTICE ADARSH KUMAR GOEl HON'BlE MR. JUSTICE AJAY KUMAR MITTAl 'J: \"\"? - ,... -,,\"\".. c( Z ~ ~I u.. « 1: C z ~ - Income Tax Appeal No. 793 of 2010 3 others, 306 ITR 277 (SC), whereas the assessee had offered an explanation which could not be substantiated in the light of the Apex Court judgment referred in question No.(i) and ought to have been taken as deemed concealment within Explanation - 1(8) of Section 271 (1)(c) of the Income Tax Act, 1961?\" The facts, in brief, necessary for adjudication, as narrated in the appeal, are that the return of income for the assessment year in question furnished by the respondent-assessee at an income of Rs. 18,7601- was processed under Section 143(1)(a) of the Act. It was detected that since the turnover of the assessee for the financial year 1:999-2000, relevant to the assessment year in question was more ! i titian 10 crores, no deduction under Section 80HHC was allowable to it o~ profit on transfer of the Duty Entitlement Pass Book (DEPB) and t~e same having been wrongly allowed, notice under Section 148 was I ' , iJsued to the assessee. Consequently, the matter was decided under I I I . ~ection 143(3) of the Act on 30.10.2006 whereby deduction under I I ! Section 80-IB of Rs. 61, 26,445/- out of Rs. 1,10,07,743/- on total I j business profit of Rs. 5,50,57,472/- was disallowed. The assessing officer, in particular, held that the assessee had furnished inaccurate particulars of its income in form of claiming unallowable deduction under Section 80-IB on expqrt incentives. Besides, the assessing officer also initiated proceedings against the assessee for imposition of penalty under Section 271(1)(c) of the Act and, thus, issued the requisite notice. In the appeal carried by the assessee, the Commissioner of Income-tax (Appeals) {in short \"the CIT(A)\"}, .:! >- -- Income Tax Appeal No. 793 of 2010 4 observed in clear terms that on the issue of deduction under Section 80-IB, in the instant case two views were possible and the same were supported by judicial pronouncements. The CIT(A) further observed that in the scenario of the present case it could not be said with a definite view that the assessee had furnished any inaccurate particulars or had concealed any material. The CIT(A) consequently, deleted the penalty imposed under Section 271 (1)(c) of the Act vide order dated 20.8.2009. The Revenue feeling aggrieved~ approached the Tribunal ~ c?rrying appeal against the order of the CIT(A). The Tribunal put its s~al of affirmation on the order of the lower appellate authority and , i dismissed\"the Revenue's appeal by order dated 17.3.2011 and it is I I hfW the Revenue is once again in appeal before us under Section 2~OA of the Act. I We have heard learned counsel for the parties and have p~rused the record. I I! The only point for consideration by this Court is, whether in i t~e facts and circumstances, the penalty imposed under Section 2t1(1)(c) of the Act on the amount which was wrongly claimed as deduction under SeCtion 80-18 on account of export incentive, had been rightly deleted by the CIT(A) and affirmed by the Tribunal. Similar issue came up for consideration before this Court in Income Tax Appeal No. 225 of 2010 (The Commissioner of Income Tax Vs. Mis. Rai Overseas) decided on 28.7.2010 wherein it has been held as under: ~ ¥\"YT~ ; 'tt .. ~h~ofueTax Appeal No. 793 of 2010 5 \"4. In view of factual finding of the Tribunal, it cannot be disputed that the issue was debatable and deduction claimed by the Assessee did not lack bonafides. In such a situation, penalty under Section 271(1) (c) of the Act was not attracted. In recent judgment of the Hon'ble Supreme Court in CIT v. Reliance Petroproducts (P) Ltd. [2010] 230 CTR 320, the legal position to this effect has been reiterated. Ifthe Assessee has made full disclosure in the I- ~ ::» O. U J: C) - J: