Container Corporation of India Ltd., New Delhi V. ACIT, New Delhi

ITA 2278/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3786 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-05-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 14-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GEETMALA MOHANEY
• Keywords: Depreciation; Advance ruling; Speculation loss; Wrong claim; Difference of opinion; Onus to prove
• Section: 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B DELHI BEFORE SHRI C.L. SETHI AND SHRI K.G. BANSAL ITA NOS. 2278, 2279 & 2280(DEL)/2010 ASSESSMENT YEAR: 2003-04, 2004-05 & 2005-06 CONTAINER CORPORATION OF ASSISTANT COMMISSIONER OF INDIA LTD., CONCOR BHAWAN, VS. INC OME-TAX, CIRCLE 3(1), C-3, MATHURA ROAD, NEW DELHI. NEW DELHI. PAN-AAACC1205A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. SAMPATH, ADVOCATE RESPONDENT BY : MS. GEETMALA MOHANEY, CIT- DR ORDER PER K.G. BANSAL : AM ALL THESE APPEALS INVOLVE THE SAME GROUNDS. IN THE COURSE OF HEARING BEFORE US, THE LD. COUNSEL FOR THE ASSES SEE EXPLAINED THAT GROUND NO. 1 PROJECTS THE REAL GRIEVANCE OF THE ASSE SSEE THAT THE LD. CIT(APPEALS) ERRED IN CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. OTHER GROUNDS ARE IN THE NATURE OF ARGUMENTS AND DECISIONS IN SUPPORT OF THIS GROUND. THEREF ORE, DETERMINATION OF GROUND NO. 1 SHALL DISPOSE OFF THE APPEALS. IT IS FURTHER EXPLAINED THAT ALL THE APPEALS INVOLVE IDENTICAL FACTS AND, THEREF ORE, IF THE APPEAL FOR ASSESSMENT YEAR 2003-04 IS DISPOSED OFF, OTHER APPEALS SHALL STAND DISPOSED OFF ACCORDINGLY. IN VIEW OF THESE EXP LANATIONS, WE PROCEED TO ITA NOS. 2278 TO 2280(DEL)/2010 2 DISCUSS THE FACTS AND RIVAL SUBMISSIONS IN RESP ECT OF ASSESSMENT YEAR 2003-04. 2. BRIEFLY, THE FACTS ARE THAT THE ASSESSEE-COM PANY HAD FILED ITS RETURN ON 2.12.2003 DECLARING TOTAL INCOME OF RS. 3,27,62,12,719/-. THIS RETURN WAS PROCESSED U/S 143(1) ON 22.3.2004. SU BSEQUENTLY, THE CASE WAS TAKEN UP FOR SCRUTINY BY ISSUING NOTICE U/ S 143(2) ON 13.10.2004. IT WAS FOUND THAT THE ASSESSEE IS A PUBLIC SECTOR UNDERTAKING (PSU), FUNCTIONING UNDER THE MINISTRY OF RAILWAYS. IT IS ENGAGED IN THE BUSINESS OF HANDLING AND TRANSPORTING CONTAINER-CARGO. THE ACTIVITIES ARE PRIMARILY CARRIED OUT FROM INTERNAL CONTAINER DEPOTS (ICD) AND CONTAINER FREIGHT STATIONS (CFS) SPREAD ALL OVER THE COUNTRY. TH E WAGONS REQUIRED BY IT FORM PART OF THE RAILWAY SYSTEM. THESE WAGONS ARE USED FOR THE CARRIAGE OF CONTAINER-CARGO. 2.1 IN THE RETURN, THE ASSESSEE HAD CLAIMED DEDU CTION OF RS. 47,45,91,484/- U/S 80-IA IN RESPECT OF THE PROFIT S OF THE ICD ON THE GROUND THAT THEY FORM INLAND PORTS. THE AO DID NOT ACCEPT THIS CONTENTION AND DISALLOWED THE CLAIM OF THE ASSESSEE. THE FIND INGS OF THE AO WERE CONFIRMED BY THE CIT(APPEALS) AND THE TRIBUNAL. ITA NOS. 2278 TO 2280(DEL)/2010 3 2.2 PENALTY PROCEEDINGS WERE ALSO INITIATED U/ S 271(1)(C) OF THE ACT. THESE PROCEEDINGS WERE COMPLETED ON 31.3.2009 B Y LEVYING MINIMUM PENALTY OF RS. 5,30,39,074/-. THE LD. CIT(APPEALS ) CONFIRMED THE LEVY OF PENALTY BY INTER-ALIA MENTIONING THAT AFTER AMEN DMENT IN SECTION 80IA BY FINANCE ACT, 2001, WITH EFFECT FROM 01.04.2002, T HERE HAS BEEN A CHANGE IN THE DEFINITION OF THE TERM INFRASTRUCTURE FA CILITY. EARLIER, UNDER THE RESIDUARY CLAUSE OF THE DEFINITION, THE BOARD HAD BEEN EMPOWERED TO DECLARE ANY OTHER FACILITY OF SIMILAR NATURE TO B E THE INFRASTRUCTURE FACILITY BY NOTIFICATION IN THIS BEHALF IN THE OFFICIAL GAZ ETTE. THE ICD WAS SO NOTIFIED BY THE BOARD. HOWEVER, AFTER THE AMEN DMENT, THE AFORESAID RESIDUARY CLAUSE IN THE EXPLANATION WAS OMITTED A ND, THEREFORE, THE NOTIFICATION OF THE BOARD CEASED TO HAVE EFFECT FROM ASSESSMENT YEAR 2002-03. ACCORDINGLY, THE ICD NO LONGER REMAINE D INFRASTRUCTURE FACILITY. THEREFORE, THE CLAIM OF THE ASSESSEE WAS BOGUS. BY MAKING SUCH A CLAIM, IT HAS MADE ITSELF LIABLE TO BE PE NALIZED U/S 271(1)(C) OF THE ACT. 3. BEFORE US, THE LD. COUNSEL BRIEFLY SUMMARIZED THE FACTS OF THE CASE THAT THE ASSESSEE IS A PSU IN WHICH GOVER NMENT HOLDS 65% SHARE ITA NOS. 2278 TO 2280(DEL)/2010 4 AND PUBLIC INSTITUTIONS AND OTHERS HOLD 35% S HARE. THE ASSESSEE HAD FILED THE RETURN ON 2.12.2003 DECLARING INCOME OF ABOUT RS. 327.62 CRORE. THE AO COMPLETED THE ASSESSMENT ON 30.11.2005 ASSESSING THE TOTAL INCOME AT ABOUT RS. 376.98 CRORE. TWO MAIN DI SALLOWANCES MADE BY THE AO WERE IN REGARD TO CLAIM OF DEDUCTION U/S 8 0IA OF ABOUT RS. 47.46 CRORE AND DEPRECIATION ON COMPUTERS OF ABOUT RS. 1.19 CRORE. THE LD. CIT(APPEALS) ALLOWED HIGHER DEDUCTION ON COMPUTE RS. HE ALSO ALLOWED DEDUCTION U/S 80IA IN RESPECT OF ROLLING STOCK. BUT, HE DID NOT ALLOW DEDUCTION U/S 80IA IN RESPECT OF THE ICD. THE P ERSONS RESPONSIBLE FOR FILING THE RETURN OF INCOME HAVE NO INTEREST I N THE OVERALL TAX LIABILITY OF THE ASSESSEE. IN FACT, THE RETURN WAS FILED D ECLARING INCOME OF ABOUT RS. 327.62 CRORE. IN SUCH A SITUATION, THE ASSESSEE CAN POSSIBLY NOT BE HELD GUILTY OF CONCEALMENT OF INCOME OF ABOUT RS. 47.45 CRORE. 3.1 COMING TO THE MERITS OF THE CLAIM U/S 80IA, O UR ATTENTION HAS BEEN DRAWN TOWARDS SUB-SECTION (12) OF OLD SECTION 80IA, WHICH DEFINES A NUMBER OF TERMS INCLUDING THE TERM INFRASTRUCTU RE FACILITY. THIS TERM HAS BEEN DEFINED IN CLAUSE (CA) IN AN EXHAUSTIV E FASHION. SUB-CLAUSE (I) OF THE AFORESAID CLAUSE CONTAINS THE ENTRIES- A RO AD, BRIDGE, AIRPORT, PORT, INLAND WATERWAYS AND INLAND PORTS, RAIL SYSTEM OR ANY OTHER PUBLIC ITA NOS. 2278 TO 2280(DEL)/2010 5 FACILITY OF A SIMILAR NATURE AS MAY BE NOTIFI ED BY THE BOARD IN THIS BEHALF IN THE OFFICIAL GAZETTE. THE ICD WAS EAR LIER NOTIFIED BY THE BOARD UNDER THE RESIDUARY PART OF THE AFORESAID SUB-CL AUSE. THIS SECTION UNDERWENT AMENDMENT BY FINANCE ACT, 2001, AND THE DEDUCTION IS COVERED UNDER SUB-SECTION (4). THE EXPLANATION UNDER T HIS SUB-SECTION CONTAINS FOUR ENTRIES. CLAUSE (D) IS- A PORT, AIRPORT, INLAND WATERWAY OR INLAND PORT. THE EXPLANATION HAS BEEN FURTHER AMENDED BY FINANCE ACT, 2007, WITH EFFECT FROM 01.04.2008 TO INCLUDE IN THIS C LAUSE AN ADDITIONAL ITEM, I.E., NAVIGATIONAL CHANNEL IN THE SEA. THE CA SE OF THE LD. COUNSEL IS THAT EARLIER THE WORDS USED IN SUB-SECTION (12) WER E INLAND WATERWAYS AND INLAND PORTS, WHICH HAVE BEEN SUBSTITUTED BY THE WORDS INLAND WATERWAY OR INLAND PORT. THIS DOES NOT CHANGE THE CONTENTS AND, THEREFORE, EVEN IN ABSENCE OF BOARD NOTIFICATIO N UNDER THE OLD PROVISION, THE ICD CONSTITUTES AN INLAND PORT AND, THEREF ORE, AN INFRASTRUCTURE FACILITY. HOWEVER, THE TRIBUNAL CAME TO A DI FFERENT INTERPRETATION IN THE QUANTUM APPEAL. IT HELD THAT SINCE THE ICD IS NOT AN INLAND PORT AND, THEREFORE, THE ICD WAS NOTIFIED UNDER THE RES IDUARY CLAUSE. THE RESIDUARY CLAUSE HAS NOW BEEN OMITTED. SINCE IC D IS NOT AN INLAND PORT, CONSEQUENTLY, THE ICD DOES NOT CONSTITUTE AN I NFRASTRUCTURE FACILITY. AT ITA NOS. 2278 TO 2280(DEL)/2010 6 THIS JUNCTURE, WE MAY REPRODUCE THE FINDING OF THE TRIBUNAL, CONTAINED IN PARAGRAPH NOS. 36 TO 38, AS UNDER:- 36. ON A CLOSE READING OF THE EXPLANATION INSE RTED BY FINANCE ACT, 2000 WITH EFFECT FROM 1.4.2001 AND T HE EXPLANATION AS SUBSTITUTED BY FINANCE ACT, 2001 W ITH EFFECT FROM 1.4.2002, IT MAY BE NOTICED THAT THE PHRAS E ANY OTHER PUBLIC FACILITY OF SIMILAR NATURE AS MAY BE NOTI FIED BY THE BOARD IN THIS BEHALF IN THE OFFICIAL GAZETTE HA S BEEN OMITTED FROM THE EXPLANATION AS SUBSTITUTED BY F INANCE ACT, 2001 WITH EFFECT FROM 1.4.2002. THE CONTENTION O F THE ASSESSEE THAT ICD ARE PART AND PARCEL OF INL AND PORT HAS NO FORCE. THE WORD INLAND PORT HAS NOT BEEN DEF INED IN THE ACT THOUGH IT WAS ALREADY MENTIONED IN THE OLD EXPLANATION INSERTED BY FINANCE ACT, 2000 WITH EFFECT FROM 1.4 .2001 AND THE SAME CONTINUED IN EXISTENCE IN THE NEW EXPL ANATION SUBSTITUTED BY FINANCE ACT, 2001 WITH EFFECT FROM 1.4.2002. 37. WE, THEREFORE, ARE OF THE OPINION THAT TERM INLAND PORT DOES NOT INCLUDE THE ICD. HAD IT BEEN INCLUDE D IN THE TERM INLAND PORT, THE CBDT WOULD HAVE NOT NOTIF IED THEM AS SEPARATE INFRASTRUCTURE FACILITY AND WOULD HA VE CLARIFIED THAT ICDS AND CFSS ARE PART AND PARCEL OF I NLAND PORT. FOR THE SAKE OF CONVENIENCE, RELEVANT PORTION OF CBDT NOTIFICATION NO. 10682 DATED 1.9.1998 IS REPRODU CED BELOW:- DEDUCTION UNDER SEC. 80IA IN EXERCISE OF THE POWERS CONFERRED BY CLAUSE (C A) OF SUB- SECTION 12 OF SECTION 80-IA OF THE INCOME-TAX ACT , 1961 (43 OF 1961), THE CBDT HEREBY NOTIFIES INLAND CON TAINER DEPOT AND CENTRAL FREIGHT STATION (CFS) IS INFRASTRU CTURE FACILITY. PROVIDED THAT SUCH PLACES ARE NOTIFIED AS IN LAND CONTAINER DEPOT AND CENTRAL FREIGHT STATION UNDER SECTION 7 (CA) OF THE CUSTOMS ACT, 1961. THUS, LOOKING TO THE OLD PROVISION OF EXPLANATIO N INSERTED BY FINANCE ACT, 2000 W.E.F. 1.4.2001 AND CBDT NO TIFICATION ITA NOS. 2278 TO 2280(DEL)/2010 7 DATED 1.9.98, I HOLD THAT THE REQUIREMENT OF N OTIFICATION BY THE CUSTOM DEPARTMENT TREATING THE ICD AS INFRA STRUCTURE FACILITY WAS APPLICABLE ONLY UP TO THE ASSESSME NT YEAR 2002- 03. ONCE THE PHRASE ANY OTHER FACILITY OF SIMILAR NATURE HAS BEEN TAKEN AWAY BY THE NEW EXPLANATION SUB STITUTED BY FINANCE 2001 W.E.F. 1.4.2002, THE ICDS ARE NO M ORE INFRASTRUCTURE FACILITY FOR THE PURPOSES OF D EDUCTION UNDER SECTION 80-IA. IN THE LIGHT OF THESE LEGAL PROV ISIONS, I HOLD THAT THE APPELLANT WAS NOT ENTITLED FOR ANY DE DUCTION UNDER SECTION 80-IA AGAINST INCOME DERIVED FROM AFORESAID 5 ICDS MENTIONED IN PRECEDING PARA. THUS, THE Q UESTION OF NOTIFICATION BY CUSTOM AUTHORITIES IS NO MORE RELEVANT FOR THE DEDUCTION UNDER SECTION 80-IA IN THE ASSESS MENT YEAR 2003-04 (UNDER APPEAL). HENCE, I DIRECT THE AO NOT TO ALLOW DEDUCTION UNDER SECTION 80-IA AGAINST THE INCOME DERIVED FROM THE AFORESAID 5 ICDS. 38. THUS, AFTER AMENDMENT OF THE SECTION VIDE FINANCE ACT, 2001 WITH EFFECT FROM 1.4.2002 THERE IS CERTAIN CHANGE IN THE DEFINITION OF INFRASTRUCTURE FACILITY GIVEN IN THE EXPLANATION. PRIOR TO THE SAID AMENDMENT, SUB-SECTION (12) ( CA) PROVIDED THAT INFRASTRUCTURE FACILITY MEANS (I) A ROAD , BRIDGE, AIRPORT, PORT, INLAND WATERWAYS AND INLAND PORTS, RAIL SYSTEM OR ANY OTHER PUBLIC FACILITY OF SIMILAR NATURE AS MAY BE NOTIFIED BY THE BOARD IN THIS BEHALF IN THE OFFICIAL GAZETTE. BUT EXPLANATION (A) AND (D) TO SUB-SECTION (4)(C) PROVIDES THAT FOR THE PURPOSE OF THIS CLAUSE INFRASTRUCTURE FACILITY MEANS- (A) A ROAD INCLUDING TOLL ROAD, A BRIDGE OR A RAIL SYSTEM,.(D) A PORT, AIRPORT, INLAND WATERWAY S OR INLAND PORT. THUS, THE PORTION AS MAY BE NOTIFI ED BY THE BOARD IN THIS BEHALF IN THE OFFICIAL GAZETTE A S APPEARING BEFORE THE SAID AMENDMENT HAS BEEN DELETED I N THE NEW EXPLANATION. THEREFORE, THE AOS OBSERVATION A BOUT THE CUSTOMS NOTIFICATION IN RESPECT OF THE ICDS IS IRRELEVANT AND UNJUSTIFIED. NOT ONLY THAT THE ASSESSEES CLAI M BASED ON CBDTS AND CUSTOMS NOTIFICATIONS IN RESPECT OF THE ICDS REFERRED TO ABOVE IS NOT CORRECT, AFTER THE SAI D AMENDMENT DROPPING THE WORDS AS MAY BE NOTIFIED BY THE BOARD IN THIS BEHALF IN THE OFFICIAL GAZETTE THE CLAIM IS NOT ALLOWABLE ON ITA NOS. 2278 TO 2280(DEL)/2010 8 THE BASIS OF THE ABOVE EXPLANATION INDEPENDENT O F THE NOTIFICATIONS. 3.2 COMING TO THE LEVY OF PENALTY, IT IS SUBMITT ED THAT THE ASSESSEE HAD FURNISHED A LETTER DATED 10.11.2003 TO SHRI P.N. DUBEY, COMMISSIONER OF INCOME-TAX, INFORMING THAT THE ASSESSEE IS CARRYING ON THE BUSINESS OF HANDLING AND TRANSPORTATION OF CONTAINER-CARGO. T HE ACTIVITIES OF THE ASSESSEE ARE DIVIDED INTO DOMESTIC AND INTERNAT IONAL TRAFFIC. THE INTERNATIONAL TRAFFIC IS MANAGED THROUGH THE IC D, WHICH ARE DECLARED AS CUSTOM PORTS UNDER THE CUSTOMS ACT AND THEY ALSO QUALIFY FOR EXEMPTION UNDER SECTION 10(23)(G) OF THE ACT. TH E ACT ALSO ALLOWS DEDUCTION U/S 80IA FOR DEVELOPING ETC. OF INFR ASTRUCTURE FACILITIES, SUCH AS INLAND PORTS (ICD) AND RAILWAY SYSTEM (ROLL ING STOCK), WHICH QUALIFY FOR DEDUCTION U/S 80IA. IN VIEW OF THE ABOVE, TH E ASSESSEE-COMPANY PROPOSES TO CLAIM DEDUCTION U/S 80IA IN RESPECT OF INLAND PORTS AND RAILWAY SYSTEM FOR ASSESSMENT YEAR 2003-04. THE RETURN OF INCOME WAS FILED ON 02.12.2003 AFTER GIVING THE AFOR ESAID INTIMATION TO THE COMMISSIONER OF INCOME-TAX. IT IS ARGUED THAT THE ASSESSEE HAD DISCLOSED ITS INTENTION TO THE CIT EVEN BEFORE FILING T HE RETURN. THEREFORE, IT CANNOT BE CHARGED WITH CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. ITA NOS. 2278 TO 2280(DEL)/2010 9 3.3 IT IS FURTHER SUBMITTED THAT THE AO HAD INITIATED THE PROCEEDINGS FOR CONCEALMENT OF INCOME, AS MENTIONED ON THE LAST PAGE OF HIS ORDER. HOWEVER, THE PENALTY HAS BEEN LEVIED FOR FURNI SHING INACCURATE PARTICULARS OF INCOME. THUS, THE PENALTY IS LEVI ED FOR A DEFAULT DIFFERENT FROM THE DEFAULT IN RESPECT OF WHICH SHOW CAUSE NOTICE WAS ISSUED. IN ABSENCE OF APPROPRIATE SHOW CAUSE NOTICE, THE P ENALTY IS BAD IN LAW. AT THIS JUNCTURE, WE MAY MENTION THAT THE AO MA DE DETAILED DISCUSSION FOR INITIATION OF PENALTY AND HIS REASONS READ AS UNDER:- IN VIEW OF THE FACTS AND REASONS DISCUSSED IN DETAIL, SINCE THE ASSESSEE CORPORATION TRIED TO CONCEAL THE TAXABLE INCOME BY CLAIMING DEDUCTION U/S 80IA TO WHICH IT WAS N OT ENTITLED, PENALTY PROCEEDINGS U/S 271(1 )(C) OF THE I.T.AC T, 1961 HAVE BEEN INITIATED SEPARATELY. THE REASONS DESCRIBE D ABOVE MAY BE TREATED AS SATISFACTION NOTE FOR INITIATIN G PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T.ACT, 1961. 3.4 IT IS ARGUED THAT THE ASSESSEE HAD MADE FUL L AND TRUE DISCLOSURE OF PARTICULARS REGARDING THE CLAIM. THE DEDUCTION WAS QUANTIFIED IN THE AUDIT REPORT. THUS, IT CANNOT BE SAID THAT THE A SSESSEE SUPPRESSED ANY MATERIAL FACT IN RESPECT OF THE CLAIM. IT IS FU RTHER ARGUED THAT THE VIEW TAKEN BY THE ASSESSEE WAS NOT ONLY A POSSIBLE VI EW BUT A PLAUSIBLE VIEW IN LAW. THEREFORE, THERE IS A BONA FIDE DIF FERENCE OF OPINION BETWEEN ITA NOS. 2278 TO 2280(DEL)/2010 10 IT AND THE REVENUE AUTHORITIES REGARDING THE ADM ISSIBILITY OF THE CLAIM. EVEN IF THE CLAIM IS FOUND TO BE ERRONEOUS, TH AT BY ITSELF IS NOT ENOUGH FOR LEVY OF PENALTY IN THE CIRCUMSTANCES NARRAT ED ABOVE. 4. IN REPLY, THE LD. CIT, DR SUBMITTED THAT TH E PROVISION UNDERWENT MATERIAL CHANGE AFTER ITS AMENDMENT BY FINANCE ACT, 2001. AFTER THE AMENDMENT, THE POWER OF THE BOARD TO NOTIFY A S IMILAR FACILITY AS INFRASTRUCTURE FACILITY WAS WITHDRAWN AND, THEREF ORE, THE EARLIER NOTIFICATION IN THE MATTER CEASED TO HAVE EFFECT. THE DECISI ON OF THE TRIBUNAL IN QUANTUM APPEAL LEAVES NO AMBIGUITY IN INTERPRETA TION AND IT IS PATENTLY CLEAR THAT ICD DOES NOT CONSTITUTE AN INFRAST RUCTURE FACILITY. VARIOUS SUBMISSIONS OF THE ASSESSEE IN THIS BEHALF ARE MADE MERELY WITH A VIEW TO CREATE CONFUSION. 4.1 SHE ALSO REFERRED TO THE LETTER ADDRESSED TO THE COMMISSIONER OF INCOME-TAX AND SUBMITTED THAT IT HAS BEEN WRONGLY ADDRESSED. IN ANY CASE, THE CIT IS NOT AN AUTHORITY ENTRUSTED WITH THE FUNCTION OF GRANTING RULING ON SUCH A LETTER. IF THE ASSESSEE HAS ANY CONFUS ION IN MIND, IT SHOULD HAVE APPROACHED THE AUTHORITY FOR ADVANCE RULING. THE ASSESSEE ALSO DID NOT CORRESPOND WITH THE BOARD IN ANY MANNER WHATSOEV ER FOR ANY ITA NOS. 2278 TO 2280(DEL)/2010 11 CLARIFICATION IN THE MATTER WHILE IT HAS BEEN COR RESPONDING WITH THE CENTRAL BOARD OF INDIRECT TAXES, DEPARTMENT OF COM MERCE AND MINISTRY OF SHIPPING. THE CENTRAL BOARD OF EXCISE AND CUST OMS AND DEPARTMENT OF COMMERCE HAVE SUO-MOTU SENT COMMUNICATIONS TO THE CENTRAL BOARD OF DIRECT TAXES INFORMING THAT THE ICD CONSTITUTES CUSTOM AREA ATTACHED TO A PORT AND ICD CONSTITUTES AN INLAND PORT. H OWEVER, THERE IS NO SUCH CLARIFICATION FROM THE BOARD, WHICH COULD HAVE BEE N EASILY SOUGHT BY THE ASSESSEE, AS IT TRIED TO DO SO FROM OTHER DEPAR TMENTS, THE CLARIFICATION FROM WHICH IS OF NO CONSEQUENCE IN SO FAR AS DEDUCTION U/S 80IA IS CONCERNED. IN ANY CASE, THE ISSUE STANDS BEYOND THE PALE OF DOUBT AFTER THE DECISION OF THE TRIBUNAL IN QUANTUM APPEAL. THEREFORE, IT IS ARGUED THAT SINCE THE DEDUCTION IS NOT AVAILABLE AS PER EXISTING LAW, THE CLAIM OF THE ASSESSEE IS FALSE. ACCORDINGLY, IT IS LIAB LE TO BE PENALIZED EVEN IF IT IS A PSU. 4.2 COMING TO THE DICHOTOMY BETWEEN THE NOTE REC ORDED IN THE COURSE OF ASSESSMENT FOR INITIATION OF PENALTY AND THE G ROUND FOR LEVY OF PENALTY, IT IS SUBMITTED THAT THE ASSESSEE HAS NOT TAKEN UP ANY SUCH GROUND IN ITS APPEAL. IN ABSENCE THEREOF, THE ASSESSEE CANNOT EXPAND THE SCOPE OF THE APPEAL. ITA NOS. 2278 TO 2280(DEL)/2010 12 5. IN THE REJOINDER, THE LD. COUNSEL SUBMITTED THA T IT HAD DISCLOSED ITS INTENTION TO THE JURISDICTIONAL COMMISSIONER AND THIS LETTER HAS BEEN PROPERLY RECEIVED BY HIS OFFICE. ONE MAY COM E TO A CONCLUSION THAT THE CLAIM IS DEBATABLE BUT BY NO STRETCH OF IMAGINA TION IT CAN BE SAID THAT THE CLAIM IS BOGUS OR FALSE. 6. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. WE MAY DEAL WITH THE ASSUMPTION OF JURISDICTION AT THE OUTSET AS THIS INVOLVES A PRELIMINARY OBJECTION TAKEN B Y THE ASSESSEE. THE AO HAD RECORDED DETAILED REASONS FOR DENYING DEDUC TION U/S 80IA. THEREAFTER, IT IS RECORDED THAT IN VIEW OF FACT S AND REASONS, THE ASSESSEE TRIED TO CONCEAL THE TAXABLE INCOME BY CLAIMING DEDUCTION U/S 80IA TO WHICH IT IS NOT ENTITLED. THE REASONS RECORDE D AS ABOVE MAY BE TREATED AS SATISFACTION NOTE FOR INITIATING THE PENAL TY PROCEEDINGS. THEREAFTER, A DIRECTION HAS BEEN GIVEN TO INITIATE THE PENALT Y SEPARATELY. FROM THE RECORDED REASON, IT WILL BE CLEAR THAT THE PENA LTY HAS BEEN INITIATED BECAUSE IN THE VIEW OF THE ASSESSING OFFICER THE A SSESSEE-COMPANY CLAIMED DEDUCTION U/S 80IA, TO WHICH IT WAS NOT ENTITLED . THIS IS THE GROUND ON WHICH THE PENALTY HAS BEEN LEVIED. THEREFORE, THE REASON FOR INITIATING ITA NOS. 2278 TO 2280(DEL)/2010 13 PENALTY AND LEVY OF PENALTY ARE SAME. THERE MAY BE SOME VERBAL CHANGE IN RESPECT OF USE OF THE WORD CONCEAL AND THE WOR DS INACCURATE PARTICULARS IN THE PENALTY ORDER. ACCORDING TO U S, IN VIEW OF THE REASONS GIVEN FOR INITIATION OF PENALTY, THE USE OF DIFF ERENT WORDS AS AFORESAID DOES NOT MAKE THE SHOW CAUSE NOTICE BAD IN LAW . IN FACT, THE AO HAS GIVEN PROPER REASONS FOR INITIATING PENALTY AND LEVY IS BASED ON THE SAME REASONS. ACCORDINGLY, IT IS HELD THAT THE PROCEEDI NGS HAVE BEEN PROPERLY INITIATED AND THE AO ASSUMED JURISDICTION TO LEVY PENALTY IN A PERFECTLY LEGAL MANNER. 6.1 ONE OF THE SUBMISSIONS OF THE LD. COUNSEL HAS BEEN THAT IN VIEW OF COMMUNICATION FROM OTHER DEPARTMENTS, THE CLAIM OF THE ASSESSEE APPEARS TO BE CORRECT NOTWITHSTANDING THE FACT THAT THE TRIBUNAL HAS DENIED THE CLAIM. THE MATTER HAS BEEN SETTLED BY THE TRIBUNA L IN QUANTUM APPEAL. THEREFORE, WE MAY ONLY STATE THE DEFINITIONS FO UND IN THE STATUTORY LANGUAGE AT DIFFERENT TIMES. UNDER THE OLD DEFI NITION, THE PUNCTUATIONS AND WORDS USED WERE , INLAND WATERWAYS AND INLAN D PORTS,. THEREFORE, THE WORDS INLAND WATERWAYS AND THE WORDS INLAND PORTS HAVE BEEN MENTIONED IN CONJUNCTION WITH EACH OTHER. THE BOARD NOTIFIED THE ICD AS INFRASTRUCTURE FACILITY, FOR WHICH IT WAS D ULY EMPOWERED UNDER THE ITA NOS. 2278 TO 2280(DEL)/2010 14 RESIDUARY WORDS ANY OTHER PUBLIC FACILITY OF A SIMILAR NATURE AS MAY BE NOTIFIED BY THE BOARD IN THIS BEHALF IN THE OFFICI AL GAZETTE. THE PUNCTUATIONS AND THE WORDS USED IN THE NEW DEFI NITION ARE , INLAND WATERWAY, OR INLAND PORT. THUS, THE WORD A ND HAS BEEN SUBSTITUTED WITH THE WORD OR. FURTHER, UNDER 2007 AMENDM ENT, THE PUNCTUATIONS AND THE WORDS NOW ARE , INLAND WATERWAY, INLAND PORT OR NAVIGATIONAL CHANNEL IN THE SEA. THEREFORE, ONE MORE ITEM H AS BEEN ADDED, I.E., NAVIGATIONAL CHANNEL IN THE SEA. HOWEVER, W E ARE NOT CONCERNED WITH 2007 AMENDMENT. THUS, THE RELEVANT WORDS ARE INLAND WATERWAY OR INLAND PORT. THE VIEWS EXPRESSED BY THE CUSTOMS DEPARTMENT, DEPARTMENT OF COMMERCE OR THE MINISTRY OF SHIPPI NG MAY NOT HAVE ANY BEARING FOR THE REASON THAT SUCH VIEWS HAVE B EEN EXPRESSED IN TOTALLY DIFFERENT CONTEXT, I.E., LEVY OF CUSTOMS DUTY, DE -CONGESTION OF THE EXISTING PORTS AND EXPANSION OF THE SHIPPING BUSINESS. 6.2 IT HAS ALSO BEEN HIS SUBMISSION THAT SINCE T HE ASSESSEE IS A GOVERNMENT COMPANY, THEREFORE, ITS TAX-FILERS HAV E NO INTEREST IN EVADING OR AVOIDING THE PAYMENT OF LEGITIMATE TAX BY MA KING A FALSE CLAIM. WE ARE NOT IMPRESSED BY THIS LINE OF ARGUMENT. T HE REASON IS THAT EVEN IN THE CASE OF A PUBLIC LIMITED COMPANY, WHERE M AJORITY OF SHARES ARE HELD ITA NOS. 2278 TO 2280(DEL)/2010 15 BY PUBLIC AT LARGE, TAX-FILER MAY HAVE NO INTER EST IN AVOIDING OR EVADING THE PAYMENT OF LEGITIMATE TAX. BUT THAT IS NOT THE RELEVANT CONSIDERATION FOR DECIDING THE LEVY OF PENALTY. THE SAME HA S TO BE DECIDED IN THE LIGHT OF STATUTORY LANGUAGE AND DECISIONS RENDERED B Y THE COURTS IN THE MATTER. 6.3 WITH THE AFORESAID REMARKS, WE MAY NOW DISCUSS THE RIVAL SUBMISSIONS ON MERITS. THE FIRST ARGUMENT OF THE LD. COUNSEL IS THAT THE ASSESSEE MADE FULL AND TRUE DISCLOSURE OF FACTS REGARDING THE CLAIM BEFORE THE LD. COMMISSIONER OF INCOME-TAX, AT THE TIME O F FILING RETURN AND IN THE COURSE OF ASSESSMENT PROCEEDINGS. WE FIND THAT THE ORDERS OF THE LOWER AUTHORITIES HAVE MENTIONED ABOUT THE FALSIT Y OF THE CLAIM BUT NO AVERMENT OR FACT EXISTS TO SHOW THAT ANY DE TAIL OR PARTICULAR, FILED IN SUPPORT OF THE CLAIM, WAS UNTRUE OR FALSE. THE LD . DR HAS ALSO NOT BEEN ABLE TO POINT OUT TOWARDS THE FALSITY IN THE PARTICULARS OR DETAILS FILED BY THE ASSESSEE. SHE HAS ALSO NOT BEEN ABLE TO SHOW THAT ANY MATERIAL FACT HAS BEEN SUPPRESSED BY THE ASSESSEE. IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD., (2010) 322 ITR 158, THE HO NBLE COURT INTER-ALIA OBSERVED THAT IN VIEW OF THE DECISION IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS, (2008) 306 ITR 277, IT GOES WITHOUT SAYING THAT FOR APPLICABILITY OF SECTION 271(1)(C) , CONDITIONS STATED THEREIN ITA NOS. 2278 TO 2280(DEL)/2010 16 MUST EXIST. IT IS FURTHER OBSERVED THAT IN T HE PRESENT CASE THE COURT IS NOT CONCERNED WITH MENS REA BUT WITH THE FACT AS TO WHETHER THE ASSESSEE HAS FURNISHED ANY INACCURATE PARTICULARS. IN THIS CONNECTION, THE MEANING OF THE WORD INACCURATE WAS REPRODUCED FROM WEBSTE RS DICTIONARY THAT IT MEANS NOT ACCURATE, NOT EXACT OR CORRECT; NOT A CCORDING TO TRUTH, ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR T RANSCRIPT. IT IS ALSO OBSERVED THAT THE WORD PARTICULARS MEANS DETA ILS SUPPLIED IN THE RETURN OF INCOME. IF SUCH DETAILS ARE NOT ACCURATE , NOT EXACT ETC., THEN THE CHARGE U/S 271(1)(C) CAN BE SAID TO EXIST. HOWEVER, IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN THE RETURN WERE FOUND TO BE INACCURATE, ERRONEOUS OR FALSE. A MERE MAKING OF CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME AND, THEREFORE, IN ABSENCE OF SUCH INACCURATE PARTICULARS, THERE WOULD BE NO QUESTI ON OF INVITING PENALTY U/S 271(1)(C). SIMILAR CONCLUSION HAS BEEN ARRIVED AT BY HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. HONEYWELL DACE INDI A LTD. , (2006) 155 TAXMAN 530. PARAGRAPH NO. 4 OF THE JUDGMENT READ S AS UNDER:- 4. THE COMMISSIONER AS ALSO THE TRIBUNAL HAVE B OTH CONCURRENTLY COME TO THE CONCLUSION THAT THE ASS ESSEE HAD NOT FURNISHED ANY INCORRECT PARTICULARS IN THE RETUR NS FILED BY IT AND THAT MERELY BECAUSE THE ASSESSEE HAD NOT BEE N ABLE TO SUBSTANTIATE ITS CLAIM FOR DEDUCTION OF THE AMOUNT S SUFFERED ITA NOS. 2278 TO 2280(DEL)/2010 17 TOWARDS LOSSES, WAS NO GROUND FOR HOLDING THAT THE EXPENSES WERE NOT GENUINE. THERE IS, IN OUR VI EW, NO ERROR OF LAW IN THAT VIEW TO WARRANT INTERFERENCE BY THIS C OURT. SINCE THE ASSESSEE HAD ON THE FINDINGS RECORDED BY TH E COMMISSIONER AND THE TRIBUNAL FURNISHED ALL THE PARTICULARS RELATING TO THE EXPENDITURE CLAIMED IN ITS PROFIT AND LOSS ACCOUNT AND ALSO LOSS ON ACCOUNT OF SALE OF SHA RES, THE DELETION OF PENALTY BY THE COMMISSIONER AND THE TRIBUNAL WAS LEGALLY JUSTIFIED. 6.4 THE SECOND ARGUMENT OF THE LD. COUNSEL HAS B EEN THAT THE CLAIM WAS MADE ON THE BASIS OF AUDIT REPORT, WHICH IS IN TH E NATURE OF AN EXPERT OPINION. IN SUCH A SITUATION, THE CHARGE OF CON CEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME DOE S NOT ARISE. NO REBUTTAL HAS BEEN MADE BY THE LD. DR IN THIS RESPECT. I N THE CASE OF CIT VS. S. DHANABAL, (2009) 309 ITR 268, THE HONBLE COURT MENTIONED THAT THE FINDING OF THE TRIBUNAL IS THAT IT IS NOT IN DI SPUTE AS TO WHETHER THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S 8 0HHE. THE ONLY THING DISPUTED IS WITH REGARD TO QUANTUM OF DEDUCTI ON. IT ALSO NOTED THAT THE CLAIM HAS BEEN DULY CERTIFIED BY THE CHARTERED ACCOUNTANT AND, THEREFORE, THE PLEA OF THE ASSESSEE THAT THE CLAIM WAS MAD E UNDER A BONA-FIDE MISTAKE DESERVES TO BE ACCEPTED. THE TRIBUNAL ALSO NOTED THAT ALL PRIMARY FACTS WERE THERE BEFORE THE ASSESSING O FFICER. IN SUCH CIRCUMSTANCES, IT HAS BEEN HELD BY THE TRIBUNAL T HAT THE ASSESSEE CANNOT BE SAID TO HAVE FURNISHED INACCURATE PARTICULA RS OF INCOME. THIS FINDING ITA NOS. 2278 TO 2280(DEL)/2010 18 HAS BEEN UPHELD BY THE HONBLE COURT. THE RELEVAN T PORTION OF THE DECISION, CONTAINED IN PARAGRAPH NOS. 8 AND 9, ARE REPRODUCED BELOW:- 8. WE SEE NO REASON TO INTERFERE WITH THE TRIB UNALS DECISION. AS OBSERVED IN DILIP N. SHROFF V. JT. C IT & ANR. (2007) 291 ITR 519 (SC), BEFORE PENALTY CAN BE LEVIED UNDER SECTION 271(1)(C), THE ASSESSING OFFICER, IN VIEW OF THE PROVISIONS OF CLAUSE (B) OF EXPLANATION 1, MUST RETURN A FINDING THAT THE ASSESSEE FAILED TO PROVE THAT T HE EXPLANATION OFFERED BY HIM IS NOT ONLY NOT BONA FIDE, BUT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE INCOME WERE NOT DISCLOSED BY HIM. THE SUPREME COURT OBSERVED THAT APART FROM THE ASSESSEES EXPLANATION BEING NOT BONA FIDE, THE ASSESSING OFFICER SHOULD ALSO RETURN A FINDING O F FACT THAT THE ASSESSEE HAD NOT DISCLOSED ALL THE FACTS WHICH WERE MATERIAL TO THE COMPUTATION OF HIS INCOME. 9. FROM THE AFORESAID DECISION OF THE SUPREME C OURT, IT IS CLEAR THAT DE HORS THE QUESTION OF MENS REA AND THE QUESTION OF THE EFFECT THE DELETION OF THE WORD DELIBE RATE FROM THE PROVISIONS OF SECTION 271(1)(C) WOULD HAVE ON THE ISSUE OF MENS REA, AS PER THE TERMS OF THE SAID EXPLANA TION 1(B) BEFORE PENALTY CAN BE IMPOSED UPON AN ASSES SEE, IT HAS TO BE FOUND AS A QUESTION OF FACT THAT THE EXPLAN ATION OFFERED BY THE ASSESSEE IS NOT ONLY NOT BONA FIDE, BUT IT MUST ALSO BE FOUND AS A FACT THAT THE ASSESSEE HAS NOT DISC LOSED ALL THE FACTS WHICH WERE MATERIAL TO THE COMPUTATION OF H IS INCOME. IF EITHER OF THESE TWO INGREDIENTS ARE MISSI NG, THEN PENALTY CANNOT BE IMPOSED UPON THE ASSESSEE. IN THE PR ESENT CASE, WE FIND THAT THE ASSESSEE HAD CLEARLY INDICATED ALL THE FACTS FROM WHICH HIS INCOME COULD BE EASILY COMPUTED. THE ONLY QUESTION THAT REMAINED TO BE ASCERTAINED WAS TH E QUANTUM OF DEDUCTION THAT THE ASSESSEE WAS ENTITLED TO. INADVERTENTLY, THE ASSESSEE HAD CLAIMED 100 PER CENT DEDUCTION UNDER SECTION 80HHE, WHEN HE WAS ACTUALLY ENTITLED TO ONLY AN 80 PER CENT DEDUCTION. THIS ALSO, HE DID ON THE BASIS OF EXPERT ADVICE WHICH HAD BEEN CERTIFIED BY HIS CHARTERED ITA NOS. 2278 TO 2280(DEL)/2010 19 ACCOUNTANT. THE COMMISSIONER (APPEALS) AS WELL AS THE TRIBUNAL HAVE COME TO A CONCLUSIVE FINDING THAT THE EXPLANATION OFFERED BY THE ASSESSEE WAS BONA FID E AND THAT ALL FACTS WHICH WERE MATERIAL TO THE COMPUTATION OF H IS INCOME HAD BEEN DISCLOSED BY THE ASSESSEE. THAT BEING T HE CASE, THERE IS NO QUESTION OF ANY PENALTY BEING IMPOSAB LE ON THE ASSESSEE. CONSEQUENTLY, NO INTERFERENCE WITH THE TRIBUNALS ORDER IS CALLED FOR. 6.5 IT HAS ALSO BEEN HIS ARGUMENT THAT THE VIEW TAKEN BY THE ASSESSEE IS NOT ONLY A POSSIBLE VIEW BUT A PLAUSIBLE VIE W IN LAW AND IT IS FOR THIS REASON THAT THE ASSESSEE HAS MOVED APPEAL BEFORE THE HONBLE HIGH COURT. IN VIEW OF PLAUSIBILITY OF THE ASSESSEES EXPLA NATION, THERE IS A BONA FIDE DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND TH E REVENUE REGARDING DEDUCTION U/S 80IA ON THE ICD. MERE DIFFERENCE OF OPINION DOES NOT LEAD TO INFERENCE OF CONCEALMENT OF INCOME OR FUR NISHING INACCURATE PARTICULARS OF INCOME. ON THE OTHER HAND, THE CASE OF THE LD. DR IS THAT THE DECISION OF THE TRIBUNAL IN QUANTUM APPEAL SHOWS THAT THE CLAIM OF DEDUCTION IS BOGUS AND FALSE. THEREFORE, IT IS FOR THE ASSESSEE TO EXPLAIN THE REASONS AND CIRCUMSTANCES LEADING TO MAKING A FALSE CLAIM AND WHO MADE THE MISTAKE OF MAKING A FALSE CLAIM. COMI NG TO THE FACTS OF THE CASE AND THE LAW EXISTING AT DIFFERENT POINTS OF TIME, IT IS A FACT THAT UNDER THE OLD LAW, THE BOARD HAD NOTIFIED THE ICD TO BE AN INLAND PORT AND, THEREFORE, AN INLAND PORT AMOUNTED TO INFRASTRUCT URE FACILITY. THE OPERATION ITA NOS. 2278 TO 2280(DEL)/2010 20 OF THIS NOTIFICATION CAME TO AN END AFTER AMENDM ENT IN THE SECTION, UNDER WHICH THE RESIDUARY CLAUSE IN THE DEFINITION WAS DELETED, WHICH EMPOWERED THE BOARD TO NOTIFY A SIMILAR FACILITY AS INFRASTRUCTURE FACILITY. ALTHOUGH THE MATTER HAS BEEN DECIDED AGAINST THE ASSESSEE BY TAKING INTO ACCOUNT THE EFFECT OF THE AMENDMENT, THE FACT ST AYS THAT THE WORDS INLAND PORT HAVE NOT BEEN DEFINED UNDER THE A CT. WHEN A TERM USED IN A STATUTE IS NOT DEFINED UNDER THE STATUTE, I T HAS TO BE INTERPRETED ON THE BASIS OF ITS NORMAL DICTIONARY MEANING. THE DE FINITION UNDER OTHER STATUTES MAY ALSO COME TO THE AID IN INTERPRE TATION OF THE TERM. THE WHOLE OF THE QUESTION IS ALSO TO BE SEEN FROM TH E POINT OF VIEW OF THE INTENTION OF THE LEGISLATURE BECAUSE OF WHICH THE PROVISION UNDER THE INCOME-TAX ACT HAD BEEN AMENDED. SUCH MATTERS MAY LEAD TO DIVERGENT OPINIONS AND THERE COULD BE A PLAUSIBLE DIFFERE NCE OF OPINION BETWEEN THE REVENUE AND THE ASSESSEE. ON COURSE, SUCH A CONT ROVERSY WILL COME TO AN END ON RECEIPT OF THE DECISION FROM THE TERRIT ORIAL HIGH COURT OR THE SUPREME COURT. UNFORTUNATELY, NO SUCH DECISION EXISTS. THEREFORE, THE ASSESSEE DID NOT HAVE THE GUIDANCE OF THE DECISIO N OF TERRITORIAL HIGH COURT OR THE SUPREME COURT OR FOR THAT MATTER AN Y OTHER HIGH COURT. THE CUSTOMS DEPARTMENT CONSIDERS THE ICD TO BE THE C USTOM STATION. THE MINISTRY OF SHIPPING CONSIDERS THE ICD TO BE INLAND PORT. OF COURSE, ITA NOS. 2278 TO 2280(DEL)/2010 21 DIFFERENT DEPARTMENTS MAY HAVE CONSIDERATIONS I N MIND WHICH ARE DIFFERENT FROM THE CONSIDERATIONS IN THE MIND OF THE LEGISLATURE WHEN SECTION 80IA WAS AMENDED. HOWEVER, AS MENTION ED EARLIER, IN ABSENCE OF A DEFINITION UNDER THE RELEVANT STATUTE, ON E CAN TAKE RECOURSE TO THE DICTIONARY MEANING OR THE MEANING UNDER OTHER STATUTES. WHEN THAT IS DONE, CONFUSION DOES ARISE IN THE MIND AS TO W HETHER THE ICD CONSTITUTES INLAND PORT OR NOT. THE ASSESSEE HAS NOT TAKEN ANY LEGAL ADVISE IN THE MATTER BEFORE MAKING THE CLAIM. IT HAS ALSO NOT OBTAINED CLARIFICATION FROM THE BOARD, WHICH IS EMPOWERED TO DO SO. IN SUCH CIRCUMSTANCES, WE TEND TO AGREE WITH THE LD. DR THAT MERE WRITING A LE TTER TO THE LD. COMMISSIONER OF INCOME-TAX, WHO IS NOT COMPETENT TO PRONOUNCE ADVANCE RULING, SHOWS THAT THE VIEW OF THE ASSESSEE COULD BE ACCEPTED AS SUCH. NONETHELESS, THE CLARIFICATIONS FROM OTHER DEPARTMENTS DOES LEAD TO A CONFUSION AS TO WHETHER THE ICD IS AN INLAND PORT OR NOT. ACCOR DINGLY, WE ARE OF THE VIEW THAT THIS IS A CASE WHERE THERE COULD BE A DIF FERENCE OF OPINION BETWEEN THE ASSESSEE AND THE REVENUE. ACCORDINGLY, IT IS HELD THAT THE CLAIM OF THE ASSESSEE WAS NOT PRIMA FACIE FALSE OR BOGUS. IN THE CASE OF CIT VS. SHAHBAD COOPERATIVE SUGAR MILLS LTD., (2010) 322 ITR 73 (P & H), THE SUBMISSION OF THE REVENUE WAS THAT THE WRONG CLAI M OF THE ASSESSEE WAS NOT ONLY UNDER SECTION 80P BUT ALSO UNDER SECTION 80P(2) IN RESPECT OF ITA NOS. 2278 TO 2280(DEL)/2010 22 DEPRECIATION ON GUEST HOUSE. THE HONBLE COURT MENTIONED THAT SUCH POINT WAS NOT RAISED BY THE REVENUE. THE REASON S GIVEN FOR SETTING ASIDE THE WRONG CLAIM U/S 80P WILL ALSO APPLY TO WRON G CLAIM OF THE DEPRECIATION ON GUEST HOUSE. MAKING OF A WRONG CLAIM IS NOT AT PAR WITH CONCEALMENT OF INCOME OR FURNISHING INACCURATE INF ORMATION, WHICH MAY CALL FOR THE LEVY OF PENALTY. SUCH VIEW ALSO E MERGES FROM THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETR O PRODUCTS PVT. LTD. 6.6 IT IS ALSO THE CASE OF THE LD. COUNSEL THAT EVEN IF THE CLAIM WAS ERRONEOUS, THE ONLY THING WHICH COULD BE DONE WA S TO DISALLOW THE SAME, BUT IT DID NOT ENTAIL THE LEVY OF PENALTY. IN THE CASE OF CIT VS. LAKHANI INDIA LTD., (2010) 324 ITR 73, THE TRIBUNAL RETURNED A FINDING THAT THE WHOLE PROBLEM STARTED DUE TO THE DIFFERENCE OF OP INION AND IT COULD NOT BE SAID THAT THE ASSESSEE FURNISHED INACCURATE PA RTICULARS OF INCOME. THE CLAIM OF THE ASSESSEE WAS DULY CERTIFIED BY THE CERTIFICATE OF A CHARTERED ACCOUNTANT. THEREFORE, IT WAS HELD THAT PENALTY CANNOT BE LEVIED. THE HONBLE COURT MENTIONED THAT THE CONCURRENT FIND INGS RECORDED BY THE CIT(APPEALS) AND THE TRIBUNAL SHOWED THAT THE RE WAS NO CONCEALMENT OF INCOME OR MIS-REPRESENTATION BY THE ASSESSEE. THEREFORE, NO FAULT COULD BE FOUND IN THE IMPUGNED ORDER WHICH SET ASIDE THE LEVY OF PENALTY. ITA NOS. 2278 TO 2280(DEL)/2010 23 FURTHER, IN THE CASE OF CIT VS. BHARTESH JAIN, (2010) 323 ITR 358 (DEL), THE HONBLE COURT MENTIONED THAT IN SO FAR AS Q UESTION OF PENALTY RELATING TO THE CHANGE OF TREATMENT FROM BUSINESS LOSS TO SPECULATION LOSS IS CONCERNED, THE TRIBUNAL HAS RIGHTLY APPLIED T HE LAW STATED IN CIT VS. AURIC INVESTMENT AND SECURITIES LTD., (2009) 310 ITR 121 (DEL). IN THE CASE OF CIT VS. HARSH VARDHAN CHEMICALS & MINERA LS LTD., (2003) 259 ITR 212, THE PENALTY WAS LEVIED FOR CLAIMING H IGHER DEDUCTION U/S 80HH AND 80I. THE TRIBUNAL DELETED THE PENALT Y BY HOLDING THAT THE HIGHER CLAIM WAS MADE ON ARGUABLE GROUND. THERE FORE, EVEN IF LOWER CLAIMS ARE ALLOWED, PENALTY CANNOT BE IMPOSED A UTOMATICALLY. THE HONBLE COURT UPHELD THIS DECISION BY MENTIONI NG THAT IT IS NOT POSSIBLE TO UPHOLD THE LEVY OF PENALTY AND THE ASSESSEE C AN BE SAID TO HAVE SUCCESSFULLY DISCHARGED THE BURDEN OF PROOF, WHICH LAY ON IT IN TERMS OF THE EXPLANATION TO SECTION 271(1)(C). 6.7 COMING TO THE FACTS OF THIS CASE, WE HAVE AL READY MENTIONED THAT THE ISSUE WHETHER THE ICD IS AN INLAND PORT OR NOT UNDER THE AMENDED LAW IS AN ARGUABLE ONE. IN THIS CONNECTION, THE BENCH ALSO REFERRED TO THE FACT OF FORMATION OF SPECIAL BENCH IN THE CASE OF M/S ALL CARGO GLOBAL LOGISTICS LTD, ITA NO. 5059, 5018 TO 5022/M/2010 OF A BENCH, ITA NOS. 2278 TO 2280(DEL)/2010 24 MUMBAI, TO WHICH A SIMILAR QUESTION HAS BEEN REF ERRED FOR DECISION. THIS SHOWS THAT THE ISSUE IS NOT FREE FROM DOU BT AND, THEREFORE, THERE COULD BE GENUINE DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND THE REVENUE ON THIS ISSUE. QUESTION NO. 2 REFERRE D TO THE SPECIAL BENCH IS- WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) WAS JUSTIFIED IN UPHOLDING THE DIS ALLOWANCE OF DEDUCTION U/S 80IA(4) OF THE ACT, ON MERITS? 6.8 FURTHER, THE ASSESSEE, ON THE BASIS OF INFORM ATION FROM OTHER DEPARTMENTS CAN BE UNDER A BONA FIDE BELIEF T HAT THE ICD IS AN INLAND PORT. THEREFORE, IF A CLAIM IS MADE FOR DEDUCT ION BY FURNISHING ALL THE FACTS AND THE CLAIM IS SUPPORTED BY THE AUDIT R EPORT, IT WILL NOT BE FEASIBLE FOR US TO RECORD A FINDING THAT THE INCOME HAS BE EN CONCEALED OR ANY INACCURATE PARTICULAR OF INCOME HAS BEEN FURNI SHED. ACCORDINGLY, IT IS HELD THAT THE LOWER AUTHORITIES WERE NOT RIGHT IN LEVYING/SUSTAINING THE PENALTY. 7. THE FACTS FOR ASSESSMENT YEARS 2004-05 AND 2 005-06 ARE ADMITTED TO BE IDENTICAL WITH THE FACTS FOR ASSESSMENT YE AR 2003-04 (SUPRA). BY ITA NOS. 2278 TO 2280(DEL)/2010 25 RELYING ON THE ORDER FOR ASSESSMENT YEAR 2003-0 4, IT IS HELD THAT THE LEVY OF PENALTY FOR THESE YEARS WAS ALSO NOT JUSTIF IED. 8. IN THE RESULT, ALL THE THREE APPEALS OF THE A SSESSEE ARE ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 1 7TH JUNE, 2011. SD/- SD/- (C.L.SETHI) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 17TH JUNE, 2011. SP SATIA COPY OF THE ORDER FORWARDED TO:- CONTAINER CORPORATION OF INDIA LTD., NEW DELHI. ACIT, CIRCLE 3(1), NEW DELHI. CIT(A) CIT THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.