DCIT, New Delhi V. M/s. Eastern India Powertech Ltd., New Delhi

ITA 1972/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81631 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 27-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Retrospective amendment; Question of law; Bad and doubtful debts; Difference of opinion
• Section: 115JB; 27

Judgement Text

ITA NO.1972/DEL/2012 ASSTT. YEAR: 2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELH I BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 1972/DEL/2012 ASSESSMENT Y EAR: 2006-07 DCIT VS EASTERN INDIA POWERTECH LTD. CIRCLE-11(1), (FORMERLY KNOWN AS DLF P OWER LTD.) ROOM NO. 312, 10 TH FLOOR, DLF CENTRE, SANSAD MARG, C.R. BUILDING NEW DELHI NEW DELHI. (PAN AAACD0187C) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI R.S. SINGHVI, CA RESPONDENT BY: SHRI S ATYAJEET GOYAL, CA MRS. ASHIMA NEB , SR. DR O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE RE VENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) V NEW DELHI DATED 17.2.2011 IN APPEAL NO. 42/10-11 FOR ASSTT. YEAR 2006-07 BY WHICH THE P ENALTY IMPOSED BY THE AO VIDE PENALTY ORDER DATED 26.3.2010 PASSED U/S 271 ( 1) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) HAS BEEN DELETED AND CANCEL LED. 2. THE SOLE GROUND RAISED BY THE REVENUE IN THIS APPEAL READS AS UNDER :- ON THE FACTS AND CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY O F RS. 1,53,65,958/- IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1 961 ITA NO.1972/DEL/2012 ASSTT. YEAR: 2006-07 2 3. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDE S AND CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET THE LD. ASSESSEES REPRESENTATIVE (AR) SUBMITTED THAT THE POINT IN ISSUE IS FULLY COVERED IN FAVOUR OF THE ASSESSEE BY VIRTUE OF THE ORDER OF ITAT DELHI BENCH B NEW DELHI IN ASSESSEES OWN CASE ITA NO. 531/D/2013 VIDE ORDER DATED 13.9.2013 FOR ASSTT . YEAR 2007-08 WHEREBY APPEAL OF THE REVENUE HAS BEEN DISMISSED BY UPHOLDI NG THE ORDER OF THE CIT(A). THE LD. AR HAS ALSO PLACED A COPY OF ORDER OF THE T RIBUNAL (SUPRA) AND FURTHER SUBMITTED THAT THE CIT(A) WAS RIGHT IN DELEING THE PENALTY WHICH WAS WRONGLY IMPOSED BY THE AO BASED ON THE RETROSPECTIVE AMENDM ENT OF THE PROVISIONS OF THE ACT. 4. THE LD. AR FAIRLY ACCEPTED THAT THE TRIB UNAL IN ASSESSEES OWN CASE ORDER VIDE DATED 13.9.2013 (SUPRA) HAS DELETED AND CANCEL LED THE PENALTY IMPOSED BY THE AO. 5. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSI ON WE ARE OF THE CONSIDERED VIEW THAT ON CAREFUL PERUSAL OF THE ORDER OF THE TR IBUNAL IN ASSESSEES OWN CASE FOR ASSTT. YEAR 2007-08 VIDE DATED 13.9.2013 WE FAI RLY OBSERVE THAT THE COORDINATE BENCH OF THE TRIBUNAL HAS DELETED THE PE NALTY BY HOLDING AS UNDER :- 3.2 IT IS SEEN THAT CONSIDERING THESE ARGUMENTS, T HE PENALTY IMPOSED WAS QUASHED BY THE CIT(A) ON THE FOLLOWING REASONING:- 5.2. DECISION I HAVE CONSIDERED THE SUBMISSION OF THE AP PELLANT OBSERVATION OF THE ASSESSING OFFICER AND DECISIONS OF ITAT DELHI O N THIS ISSUE. IT IS SEEN THAT APPELLANT HAD DECLARED BOOK PROFIT DURING THE YEAR AT RS. 6,74,14,418/- U/S 115JB OF THE I.T. ACT. WHILE DOI NG SO THE APPELLANT DID NOT INCLUDE PROVISION FOR DOUBTFUL DEBTS OF RS. 13, 75,00,000/- IN THE BOOK PROFIT SO DECLARED IN THE RETURN OF INCOME. THE ASS ESSING OFFICER INCLUDED THE PROVISION FOR DOUBTFUL DEBTS OF RS. 13,75,00,00 0/- IN THE BOOK PROFIT ITA NO.1972/DEL/2012 ASSTT. YEAR: 2006-07 3 DETERMINED AND TOTAL BOOK PROFIT WAS DETERMINED AT RS. 20,49,14,418/-. THIS WAS DONE ON THE BASIS OF AMENDMENT MADE BY THE FINANCE ACT 2009, IN SECTION 115JB WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL 2001. PRIOR TO THIS AMENDMENT THERE WERE JUDGMENTS OF VARIOUS HIGH COUR TS AND SUPREME COURT ON THIS ISSUE WHEREIN IT WAS HELD THAT IN RES PECT OR PROVISION OR DIMINUTION IN THE VALUE OF ANY ASSETS, NO ADJUSTMEN T WAS REQUIRED TO BE MADE. IT IS CONTENDED BY THE APPELLANT THAT AT THE TIME OF FILING RETURN OF INCOME, THE APPELLANT WAS NOT AWARE ABOUT THE FUTUR E AMENDMENTS AND THE RETURN WAS FILED ON THE BASIS OF SUPREME COURT JUDGMENT IN THE CASE OF APOLLO TYRES LTD. VS. CIT 255 ITR 273 (SC) AND C OMMISSIONER OF INCOME-TAX, DELHI-IV V. HCL COMMET SYSTEMS & SERVIC ES LTD. (2008) 172 TAXMAN 217 (DELHI) WHEREIN IT WAS HELD THAT PROVISIO N FOR BAD DEBT AND DOUBTFUL DEBT MADE IN THE PROFIT AND LOSS ACCOUNT I S AN ASCERTAINED LIABILITY AND , THEREFORE, CANNOT BE INCLUDED IN ITS BOOK PRO FIT U/S SECTION 115B. WHEN THE RETURN OF INCOME WAS FILED BY THE APPELLAN T, THE RETROSPECTIVE AMENDMENT TO SECTION 115JB REGARDING THE CLAIM BAD DEBTS WAS NOT ON THE STATUTES. THE APPELLANT CLAIMS THAT WHILE FILIN G THE RETURN OR INCOME BASED ON VARIOUS JUDICIAL PRONOUNCEMENTS AVAILABLE ON THE SUBJECT, NO WRONG OR MALAFIDE CLAIM SAID TO HAVE BEEN MADE BY T HE APPELLANT IN THE RETURN OF INCOME. AT THE TIME OF FILING RETURN OF I NCOME NO CLEAR CUT RULING IN FAVOUR OF SUCH AMENDMENT WAS AVAILABLE, THEREFOR E, THE APPELLANT DID NOT INCLUDE THE PROVISION FOR DOUBTFUL DEBTS IN THE BOOK PROFIT DECLARED IN THE RETURN OF INCOME. THE APPELLANT HAS ALSO RELIE D UPON THE ITAT, DELHI DECISION IN THE CASE OF DCIT CIRCLE 10(1) VS. DCM S HRIRAM CONSOLIDATED LTD. ITA NO. 2140/DEL/2012 DATED 10.7.2012 AND ACIT VS. COLORBAR COSMETICS PVT. LTD. ITA NO. 144/DEL/2012 DATED 02.0 5.2012 WHERE IN PENALTY LEVIED U/S 271(1) ON THE ISSUE OF NOT INCL UDING PROVISION FOR DOUBTFUL DEBTS IN THE BOOK PROFIT U/S 115JB HAS BEE N DELETED SINCE THE RETURN OF INCOME WAS FILED BY THE APPELLANT BEFORE THE INTRODUCTION OF AMENDMENT IN SECTION 115JB IN 2009. THEREFORE, THER E WAS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS . THE RELEVANT PARA OF THE DECISION IS REPRODUCED HEREUNDER :- WE HAVE CAREFULLY CONSIDERED T HE SUBMISSION AND PERUSED THE RECORDS. WE FIND THAT SIMILAR ADDITION WAS LEVIED IN THE HANDS OF THE ASSESEE FOR ASSTT. YEAR 2006-07 & 2007-08. FOR A.Y. 2007-08 TRIBUNAL HAD NOTED THAT FOR A.Y. 2006-07 THE MATTE R HAD TRAVELED TO THE HONBLE HIGH COURT AND THE HONBLE HIGH COUR T CONFIRMED THE DELETION OF PENALTY BY OBSERVING AS UNDER :- CIT (APPEALS) AND THE TRIBUNAL HAVE DELETED THE S AID PENALTY OBSERVING THAT THE POSITION BECAME CLEAR WHEN THE R ETROSPECTIVE AMENDMENT WAS MADE W.E.F. 1.4.2001 VIDE FINANCE (N O. 2) ACT, 2009. IN THE PRESENT CASE, THE ASSESEE HAD FILED TH E RETURN ON ITA NO.1972/DEL/2012 ASSTT. YEAR: 2006-07 4 INCOME ON 29.11.2006, WHICH WAS REVISED ON 31.3.200 8. THESE ARE BEFORE THE RETROSPECTIVE AMENDMENT IN 2009. THE ASS ESEE HAD RELIED ON CIT VS. HCL COMNET SYSTEMS AND SERVICES L TD. (2008) 305 ITR 409 (SC) AND SUBMITTED THAT NO ADJUSTMENT W AS REQUIRED TO BE MADE FOR PROVISION FOR AND DOUBTFUL DEBTS UND ER CLAUSE OF TILE EXPLANATION TO SECTION 115JB. IN THESE CIRCUMST ANCES, WE FEEL THE TRIBUNAL WAS JUSTIFIED IN ACCEPTING AND HOLDING THAT THE CASE IS COVERED BY EXPLANATION I CLAUSE (B) TO SECTION 27 1(!) AND HAD CORRECTLY DISMISSED THE APPEAL OF THE REVENUE DELET ING THE PENALTY. NO SUBSTANTIAL QUESTION OF LAW AR ISES. THE APPEAL IS DISMISSED. THE FACTS OF THE APPELLANTS CASE ARE SIMILAR TO TH E ABOVE CITED DECISIONS OF HONBLE ITAT, DELHI THEREFORE RATIO O F THE ABOVE CITED JUDICIAL PRONOUNCEMENTS IS SQUARELY APPLICABLE TO THE CASE O F APPELLANT. HENCE, PENALTY U/S 271(1) OF THE IT ACT CANNOT BE LEVIED FOR NOT INCLUDING THE PROVISION FOR DOUBTFUL DEBTS IN THE BOOK PROFIT DEC LARED BY THE APPELLANT. ACCORDINGLY, PENALTY LEVIED OF RS. 1,03,12,500/- BY THE ASSESSING OFFICER IS CANCELLED. SINCE ON MERIT THE LEVY OF PENALTY HAS BE EN CANCELLED AND GROUND NO. 2 TO 2.3 HAS BEEN DECIDED IN FAVOUR OF THE APPE LLANT, THEREFORE, THE TECHNICAL GROUND RAISED BY THE APPELLANT VIDE GROUND NO. 1 TO 1.3 HAVE BECOME INFRUCTUOUS AND SAME ARE NOT BEING DECIDED . 4. IN THE AFORE-MENTIONED PECULIAR FACTS AND CIRCU MSTANCES TAKING INTO CONSIDERATION THE ARGUMENTS ON BEHALF OF THE PARTIE S BEFORE THE BENCH, WE ARE OF THE VIEW THAT THE IMPUGNED ORDER DESERVES TO BE UPH ELD AS THE LEGAL POSITION IS VERY WELL-SETTLED AND THE ASSESSEE CANNOT ANTICIPAT E ON THE DATE OF FILING OF THE RETURN WHICH ADMITTEDLY WAS 28.09.2007 THAT A RETRO SPECTIVE AMENDMENT IN LAW WOULD BE INTRODUCED BY THE FINANCE (NO. 2) ACT, 20 09 W.E.EF. 1.4.2001 THAT IS SUBSEQUENT TO THE DATE OF FILING OF THE RETURN. IN THE FACTS OF THE CASE EVEN OTHERWISE NEITHER IT CAN IT BE SAID THAT THE ASSESE ES CLAIM WAS NOT BONAFIDE NOR IT CAN BE SAID THAT THE MATERIAL FACTS WERE NOT PRO PERLY DISCLOSED AT THE TIME OF FILING OF THE RETURN. ADMITTEDLY AS PER RECORD, THE RETURN WAS FILED ON 28.9.2007 BASED ON THE PAST POSITION ON THE VERY SAME FACTS S UPPORTED BY THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT AND THE AMENDMENT TO THE STATUTE WAS INTRODUCED WITH RETROSPECTIVE EFFECT BY THE FINANCE ACT, 2009. IN THE AFORE MENTIONED PECULIAR FACTS AND CIRCUMSTANCES, THE FIN DING OF THE CIT(A) QUASHING THE PENALTY ORDER IS UPHELD. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS D ISMISSED. ITA NO.1972/DEL/2012 ASSTT. YEAR: 2006-07 5 6. COMING TO THE FACTS OF THE PRESENT CASE FRO M BARE READING OF THE IMPUGNED ORDER WE OBSERVED THAT THE CIT(A) DELETED THE PENALTY ON THE SAME LINE WITH FOLLOWING OBSERVATIONS AND FINDINGS :- ON PERUSAL OF THE ASSESSMENT ORDER, AS WELL AS THE PENALTY ORDER, IT IS NOTICED THAT IT IS NOT THE CASE OF THE ASSESSING OFFICER TH AT THE APPELLANT HAD FURNISHED ANY WRONG/INCORRECT FACT AND /OR CONCEALED ANY MAT ERIAL FACT. IN FACT, IT SI NOTICED THAT THE ASSESSING OFFICER, IN THE ASSESSME NT ORDER, HAD MADE THE ADDITION BY APPLYING CLAUSE OF EXPLANATION NO. 1 TO SECTION 115JB OF THE I.T. ACT, WHICH IS NOT AT ALL SUSTAINABLE IN VIEW OF TH E DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS. HCL COMNET AND SERVICES LTD. 305 ITR 409 AND ALSO THE JURISDICTIONAL DELHI HIGH COURT IN THE APPELLANTS OWN CASE FOR THE ASSESSMENT YEAR 2002-03 REPORTED IN 329 ITR 289. IT IS ALSO NO TICED THAT THE RETROSPECTIVE AMENDMENT IN CLAUSE (1) OF EXPLANATION 1 TO SECTION 115 JB OF THE I.T. ACT WAS SUO MOTO POINTED OUT BY THE APPELLANT DURING THE AP PELLATE PROCEEDINGS BEFORE THE CIT(A)-XIII, NEW DELHI. IN THESE CIRCUMSTANCES, IT CANNOT BE HELD THAT THE APPELLANT HAD FURNISHED ANY INACCURATE PARTICULARS OR CONCEALED ANY MATERIAL FACT. THERE IS DIFFERENCE OF OPINION BETWEEN THE AO AND C IT(A) AS TO THE CLAUSE UNDER WHICH ADDITION IS TO BE MADE. ON PERUSAL OF THE CONTENTION REGARDING APPLICAT ION OF CLAUSE (!) OF EXPLANATION 1 TO SECTION 115 JB OF THE I.T. ACT REPRODUCED HERE INABOVE, I FIND THAT THE ISSUE IS HIGHLY DEBATABLE QUESTION OF LAW. IT IS ALSO NOT ICED THAT THE CLAIM OF THE APPELLANT IS SUPPORTED BY LEGAL OPINION OF ONE MR. S.S. BAGAI, A COPY WHEREOF HAS BEEN PLACED ON PAGES 108-109 OF THE PAPER BOOK. IT IS ALL THE MORE IMPORTANT TO NOTE THAT CLAUSE (1) WAS RETROSPECTIVE LY INSERTED BY THE FINANCE (NO.2) ACT, 2009 AND THE SAME WAS NOT AVAILABLE AT THE TIME OF FILING RETURN OF INCOME BY THE APPELLANT ON 29 TH NOVEMBER, 2006. (A) THE HONBLE SUPREME COURT IN THE CASE OF CIT V S. HEG LTD. : 243 ITR 48 HELD IN THE CONTEXT OF IMPOSITION OF ADDITIONAL TAX UNDER SECTION 143(A) OF THE I.T. ACT, WHICH WAS HELD TO BE BEARING ALL THE CHAR ACTERISTICS OF PENALTY, THAT NO ADDITIONAL TAX IS LEVIABLE ON THE BASIS OF SUBSEQUE NT RETROSPECTIVE AMENDMENT IN LAW. IN THE FOLLOWING DECISIONS, REFERRED TO BY THE LD. AR FOR THE APPELLANT, PENALTY IMPOSED ON THE BASIS OF RETROSPECTIVE AMEND MENT IN LAW HAS BEEN DELETED BY THE TRIBUNAL : - HMA UDYOG (P) LTD. V. DCIT : IT A NO. 2293/DEL/2005 - DCIT VS. FORD CREDIT KOTAK MAHI NDRA LTD.:ITA NO.1219/MUM/2007 THE AFORESAID DECISIONS ARE APPLICABLE IN THE PRESE NT CASE SINCE ADDITION AS DISCUSSED ABOVE, HAS BEEN CONFIRMED BY THE CIT(A) B Y APPLYING THE ITA NO.1972/DEL/2012 ASSTT. YEAR: 2006-07 6 RETROSPECTIVELY INSERTED CLAUSE (I) OF EXPLANATION 1 TO SECTION 115JB OF THE I.T. ACT. (B) THAT APART, THE DELHI HIGH COURT IN THE RECEN T CASE OF CIT VS. KAS MOVIE PRIVATE LIMITED IN ITA NO. 793 OF 2011 HELD THAT NO PENALTY IS LEVIABLE WHERE CLAIM MADE BY THE ASSESSEE IS SUPPORTED BY LEGAL AD VICE OF THE COUNSEL. IT HAS SIMILARLY BEEN HELD IN THE FOLLOWING CASES, RELIED UPON BY THE LD. AR FOR THE APPELLANT : CIT V. MITSUI & CO. LTD. : 272 ITR 565 (DEL.) SHYAM GOPAL CHARITABLE TRUST V. DIT (EXEMPTION) : 29 0 ITR 99 (DEL) CIT V. AMAR NATH : 173 TAXMAN 395 (P & H)_ ASIAN PACKAGING (P) LIMITED, ITA NO. 315/D/2006 CIT V. SIDHARTHA ENTERPRISES: 322 ITR 80 (P&H) CARNATION NUTRA ANALOGUE FOODS LTD. V. ITO (2009) 3 4 SOT 203 (AHD.) DCIT V. A. TOSH & SONS (INDIA) LTD. ITA NOS. 1930 & 1931/KOL/2011 (KOL) THE AFORESAID DECISIONS ARE APPLICABLE IN THE PRESE NT CASE SINCE THE CLAIM MADE BY THE APPELLANT IS ON THE BASIS OF LEGAL ADVICE TA KEN FROM ONE MR. S.S. BAGAI. ON THAT REASON, TOO, IN MY VIEW, NO PENALTY IS LEVIABL E. ABOVE ALL, IN THE FOLLOWING CASES, IT HAS BEEN HE LD THAT NO PENALTY IS LEVIABLE ON LEGAL ISSUES INVOLVING BONAFIDE DISPUTE BETWEEN THE ASSESEE AND THE REVENUE: CIT V. RELIANCE PETROPRODUCTS (P) LTD. 332 ITR 158 (SC) CIT VS. VAMCHAMPIGONS & AGRO PRODUCE: 284 ITR 408 ( DEL) CIT V. BACARDI MARTINI INDIA LIMITED : 288 ITR 585 (DEL) CIT VS. VIBROS ORGANICS LIMITED : 159 TAXMAN 567 2 06 CTR 582 (DEL) CIT VS. NATH BROTEHRS EXIM INTERNATIONAL LIMITED : 2 88 ITR 670 (DEL) CIT VS. INTERNATIONAL AUDIO VISUAL CO: 288 ITR 570 (DEL) THE AFORESAID DECISIONS ARE APPLICABLE IN THE APPEA L UNDER CONSIDERATION SINCE IN THE PRESENT CASE, THERE IS A BONAFIDE DISPUTE BETWE EN THE APPELLANT AND THE REVENUE ON THE ADDITION OF PROVISION MADE WHILE COM PUTING BOOK PROFITS. THE APPELLANT HAS ALSO NOT FURNISHED ANY INACCURATE PAR TICULARS OR CONCEALED ANY MATERIAL FACT. (D) I ALSO FIND MERIT IN THE ALTERNATIVE CONTENTIO N OF THE LD. A.R. FOR THE APPELLANT THAT SINCE THE VERY BASIS OF ADDITION WAS CHANGED BY THE CIT(A) AS THE ADDITION WAS CONFIRMED BY APPLYING CLAUSE (1) OF EXP LANATION 1 TO SECTION 115 JB OF THE I.T. ACT WHEREAS ADDITION WAS MADE BY THE AS SESSING OFFICER BY APPLYING CLAUSE (C) OF THE SAID SECTION, THE FOUNDATION OF T HE ADDITION CEASED TO EXIST. IN SIMILAR CIRCUMSTANCES, IN THE FOLLOWING CASES PENAL TY IMPOSED HAS BEEN HELD TO BE UNSUSTAINABLE IN LAW ITA NO.1972/DEL/2012 ASSTT. YEAR: 2006-07 7 CIT V. ANANDA BAZAR PATRIK (P) LIMITED: 116 ITR 416 (CAL) GUJARAT CREDIT CORP LIMITED : 113 ITD 133/116 TTJ 619 (AHD.) (SB): SUDESH KHANNA V ACIT: 98 TTJ 106 (AHD.) FOR THE AFORESAID REASONS, PENALTY OF RS. 1,53,65,9 58/- IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271 (!) OF THE I.T. ACT IS D ELETED. 7. IN VIEW OF ABOVE AND PECULIAR FACTS AND C IRCUMSTANCES OF THE CASE WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO OTHER VALID REASON TO INTERFERE WITH THE OBSERVATIONS AND FINDINGS OF THE CIT(A) IN THE IMPU GNED ORDER AS THE LEGAL POSITION IS WELL SETTLED THAT THE ASSESSEE CANNOT A NTICIPATE ON THE DATE OF FLING OF RETURN WHICH WAS ADMITTEDLY FILED ON 29.11.2006, TH AT A RETROSPECTIVE AMENDMENT IN LAW WOULD BE INTRODUCED BY FINANCE ACT 2009 W.E.F. 1.4.2001 I.E. SUBSEQUENT TO THE DATE OF FILING RETURN. EVEN OTHERW ISE NEITHER IT CAN BE SAID THAT THE ASSESEES CLAIM WAS NOT BONAFIDE NOR THE MATERI AL FACTS WERE NOT PROPERLY DISCLOSED BY THE ASSESEE AT THE TIME OF FILING OF R ETURN. ADMITTEDLY, THE RETURN WAS FILED ON 29.11.2006 BASED ON THE PAST POSITION ON THE VERY SAME FACTS SUPPORTED BY THEY DECISIONS OF HONBLE JURISDICTIO N HIGH COURT AND PRIOR TO THE AMENDMENT TO THE PROVISION OF THE ACT WAS INTRODUCE D WHICH SUBSEQUENTLY INSERTED WITH RETROSPECTIVE EFFECT BY FINANCE ACT 2 009. UNDER THESE CIRCUMSTANCES THE CIT(A) WAS RIGHT IN CANCELLING AN D DELETING THE PENALTY AS THE PROVISIONS RETROSPECTIVE INSERTED BY FINANCE ACT 20 09 WAS NOT BEFORE THE ASSESSEE AT THE TIME OF FILING OF RETURN ON 29.11.2 006. THEREFORE, THE CIT(A) WAS ITA NO.1972/DEL/2012 ASSTT. YEAR: 2006-07 8 RIGHT IN DELETING AND CANCELLING THE PENALTY. ACCOR DINGLY THE SOLE GROUND OF THE REVENUE BEING DEVOID OF MERITS IS DISMISSED AND IMP UGNED ORDER IS UPHELD. 8. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. THE ORDER WAS PRONOUNCED ON CONCLUSION OF THE HEARING ON 22 ND AUGUST, 2014. SD/- SD/- (G.D. AGRAWAL) (CHANDRA MOHAN GARG) VICE PRESIDENT JUDICI AL MEMBER DATED 22 ND AUGUST, 2014 VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT REGISTRAR, ITAT