M/s Universal Print O Pack, Solan V. DCIT, Circle , Parwanoo

ITA 486/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6427 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-11-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 18-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Question of law; Wrong claim; Revised return
• Section: 271(1)(c); 143(1); 80IA; 80IC; 80HH; 191

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B , CHANDIGARH , !' #$ % & ' ($ , BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.486/CHD/2018 ( UNDER SECTION 12AA(3) OF THE ACT) M/S UNIVERSAL PRINT O PACK, SOLAN. THE D. C.I.T., CIRCLE PARWANOO. ./PAN NO: AABFU8813G /ASSESSEE BY : SHRI PARIKSHIT AGGARWAL, CA / REVENUE BY : SHRI MANJIT SINGH, SR. DR /DATE OF HEARING : 20.11.2018 !'#$%& /DATE OF PRONOUNCEMENT:15.02.2019 /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SHIMLA (IN SHORT CIT(A) DATED 31.1.201 8 CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.THAT THE IMPUGNED ORDER IS AGAINST FACTS AND LAW . 2. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CAS E, THE WORTHY CIT(A) WAS NOT JUSTIFIED IN CONFIRMING T HE ACTION OF THE LD. AO FOR IMPOSING THE PENALTY U/S 271(L)(C) ON DISALLOWANCE OF CLAIM OF DEDUCTION U/S ITA NO.486/CHD/2018 A.Y.2012-13 2 80IC OF RS. 1,13,476/- ON ACCOUNT OF DISCOUNT RECEIVED. 3. THAT ON LAW, FACTS AND CIRCUMSTANCES OF ;;HE CAS E, THE WORTHY CIT(A) WAS NOT JUSTIFIED IN CONFIRMING T HE ACTION OF THE LD. AO FOR IMPOSING THE PENALTY U/S 271(L)(C) ON DISALLOWANCE OF CLAIM OF DEDUCTION U/S 80IC OF RS. 3,27,898/- ON ACCOUNT OF INTEREST. 4. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE , THE WORTHY CIT(A)WAS NOT JUSTIFIED IN CONFIRMING TH E ACTION OF THE LD. AO FOR IMPOSING THE PENALTY U/S 271(L)(C) ON DISALLOWANCE OF CLAIM OF DEDUCTION U/S 80IC OF RS. 10,550/- ON ACCOUNT OF PROCESSING CHARGES. 5. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE IMPUGNED PENALTY ORDER ON SUSTAINED PENALTIES DESERVES TO BE SET-ASIDE SINCE THE SAME HAS BEEN PASSED WITHOUT ASSIGNING ANY REASONS FOR CONFIRMING THE PENALTY. 6. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE IMPUGNED PENALTY ORDER DESERVES TO BE QUASHED SINCE THE APPELLANT HAS NOT BEEN CHARGED WITH ANY SPECIFIC LIMB OF SEC. 271(L)( C ). 7. THAT THE APPELLANT CRAVES LEAVE FOR ANY ADDITION , DELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE SAME. 3. DRAWING OUR ATTENTION TO THE FACTS OF THE CASE, LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT PENA LTY U/S 271(1) OF THE ACT, FOR CONCEALING/FURNISHING INACCURATE PARTICULARS OF INCOME, HAD BEEN LEVIED O N ACCOUNT OF DISALLOWANCE OF ASSESSEES CLAIM OF DEDUCTION U/S 80IC OF THE ACT ON THE FOLLOWING INCOMES: 1) DISCOUNT RECEIVED = RS.1,13,476/- 2) INTEREST = RS.3,27,898/- 3) PROCESS CHARGES = RS.10,550/- 4. TAKING US THROUGH THE FINDINGS OF THE LD.CIT(A), AT PARA 5.1.2 TO 5.1.2.3 OF HIS ORDER, IT WAS POINTED OUT THAT THE LD.CIT(A) HAD UPHELD THE PENALTY, HO LDING ITA NO.486/CHD/2018 A.Y.2012-13 3 THAT THE ASSESSEES CLAIM WAS WHOLLY UNTENABLE IN L AW IN VIEW OF THE DECISION OF THE HONBLE APEX COURT I N THE CASE OF CIT VS. PANDIAN CHEMICALS LTD., 318 ITR 420(SC), WHEREIN IT WAS HELD THAT INTEREST EARNED O N DEPOSITS COULD NOT BE SAID TO BE FLOWING FROM THE INDUSTRIAL UNDERTAKING DIRECTLY SO AS TO HOLD THAT IT WAS DERIVED FROM IT ENTITLING THE ASSESSEE TO CLAIM DEDUCTION U/S 80HH OF THE ACT. OUR ATTENTION WAS DRAWN TO THE RELEVANT FINDINGS OF THE LD.CIT(A) AS UNDER: 5.1.2 THE A.O ALSO HELD THAT THE CLAIM OF DEDUCTION U/S 80IC ON DISCOUNT RECEIVED OF RS. 1,13,476/-, INTEREST OF RS. 3,27,898 AND PROCESSING CHARGES OF RS. 10,550/- WAS NOT ALLOWABLE TO THE ASSESSEE IN V IEW OF THE SUPREME COURT ORDER IN THE CASE OF PANDIAN CHEM ICALS LTD. VS CIT 262 ITR 278 AND LIBERTY INDIA LTD VS CIT 317 ITR 218. PENALTY PROCEEDINGS U/S 271(1 )(C) WERE ALS O INITIATED. NO APPEAL WAS FILED WITH REGARDS TO THE SA ID DISALLOWANCE . DURING THE PRESENT APPEAL PROCEEDINGS AGAINST THE LEVY OF PENALTY, THE APPELLANT VIDE HIS SUBMISSION S REPRODUCED SUPRA HAS SUBMITTED THAT HE DOES NOT PRES S THE IMPOSITION OF PENALTY ON OTHER ISSUES. EVEN OTHERWI SE THE MOOT QUESTION IS WHETHER THE INCOME REFERRED SUPRA COULD EVER BE TREATED AS DERIVED FROM MANUFACTURING ACTIVI TY OR NOT. THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF PANDIAN CHEMICALS LTD VS. CIT 262 ITR 278 (SC) AND LIBERTY INDI A LTD V CIT 317 ITR 218 A VERY CLEAR ON THIS ISSUE AND THE ORDERS WERE CLEARLY PRONOUNCED MUCH BEFORE THE FILI NG OF RETURN BY THE APPELLANT IN THIS CASE. THE HON'BLE SUPR EME COURT IN THE CASE OF PANDIAN CHEMICALS LTD VS. CIT (SU PRA) WAS CONCERNED WITH THE ISSUE OF DEDUCTION U/S 80HH ON INTEREST INCOME RECEIVED ON ELECTRICITY DEPOSIT MADE BY THE ASSESSEE. ON THIS ISSUE, THE FOLLOWING OBSERVATIONS WER E MADE:- THE WORDS 'DERIVED FROM' IN SECTION 80HH OF THE INC OME-TAX ACT, 1961, MUST BE UNDERSTOOD AS SOMETHING WHICH HA S A DIRECT OR IMMEDIATE NEXUS WITH THE ASSESSEE'S INDUS TRIAL UNDERTAKING. ALTHOUGH' ELECTRICITY MAY BE REQUIRED FOR THE PURPOSES OF THE INDUSTRIAL UNDERTAKING, THE DEPOSIT REQ UIRED ITA NO.486/CHD/2018 A.Y.2012-13 4 FOR ITS SUPPLY IS A STEP REMOVED FROM THE BUSINESS O F THE INDUSTRIAL UNDERTAKING. AFTER THE ABOVE OBSERVATION, IT WAS HELD AS UNDER:- 'HELD ACCORDINGLY, THAT INTEREST DERIVED BY THE INDUSTR IAL UNDERTAKING OF THE ASSESSEE ON DEPOSITS MADE WITH THE ELECTRICITY BOARD FOR THE SUPPLY OF ELECTRICITY FOR RUN NING THE INDUSTRIAL UNDERTAKING COULD NOT BE SAID TO FLOW DIR ECTLY FROM THE INDUSTRIAL UNDERTAKING ITSELF AND WAS NOT P ROFITS OR GAINS DERIVED BY THE UNDERTAKING FOR THE PURPOSE OF THE SPECIAL DEDUCTION L - RESECTION 80HH .' 5.1.2.2 ON ISSUE OF INTEREST AND CLAIM OF DEDUCTION U/S 80IC ON THE SAME, THE APPELLANT HAS MERELY TRIE D HIS LUCK TO CLAIM DEDUCTION U/S 80IC ON THE SAME EVEN THOUGH THE LAW IS VERY CLEAR ON THE SAME AND THE SA ME CANNOT BY ANY STRETCH OF IMAGINATION BE TREATED AS DERIVED FROM MANUFACTURING. THIS CLEARLY ESTABLISHES THAT T HE APPELLANT WAS MAKING A CLAIM FOR DEDUCTION FOR WHIC H IT WAS NOT ENTITLED TO. THE ALLOWANCE OF DEDUCTION U/S 80IC DOES NOT IN ANY WAY DILUTE THE FINDING OF THE A.O. W.R. T. FURNISHING THE INACCURATE PARTICULARS OF INCOME. TH E ATTEMPT BY THE ASSESSEE TO CLAIM A DEDUCTION WHICH OTHERWISE WAS NOT CLEARLY DUE TO THE APPELLANT WILL ATTRACT PENALTY U/S 271(1)(C). THE APPELLANT HAS NOT BEEN A BLE TO ESTABLISH THE BONAFIDE OF HIS CLAIM ON THAT SCORE. IT HAS BEEN HELD BY THE DELHI HIGH COURT IN THE CASE OF CIT VS. ZOOM COMMUNICATIONS PRIVATE LIMITED (DELHI HIGH COURT), ITA 07/2010,(2010) 191 TAXMAN 179, [2010] 327 ITR 510, IT IS TRUE THAT MERE SUBMITTING A CLAIM WHICH IS INC ORRECT IN LAW WOULD NOT AMOUNT TO GIVING INACCURATE PARTICULARS O F THE INCOME OF THE ASSESSES, BUT IT CANNOT BE DISPUTED THA T THE CLAIM MADE BY THE ASSESSEE NEEDS TO BE BONAFIDE. IF TH E CLAIM BESIDES BEING INCORRECT IN LAW IS MALAFIDE, EXPLANATI ON 1 TO SECTION 271(1) WOULD COME INTO PLAY AND WORK TO THE DISADVANTAGE OF THE ASSESSEE. 20. THE COURT CANNOT OVERLOOK THE FACT THAT ONLY A SMALL PERCENTAGE OF THE INCOME TAX RETURNS ARE PICKED UP F OR SCRUTINY. IF THE ASSESSEE MAKES A CLAIM WHICH IS NO T ONLY INCORRECT IN LAW BUT IS ALSO WHOLLY WITHOUT ANY BASIS AN D THE EXPLANATION FURNISHED BY HIM FOR MAKING SUCH A CLAIM IS NOT FOUND TO BE BONAFIDE, IT WOULD BE DIFFICULT TO SAY TH AT HE WOULD STILL NOT BE LIABLE TO PENALTY UNDER SECTION 271(1 )(C) OF THE ACT. IF WE TAKE THE VIEW THAT A CLAIM WHICH IS W HOLLY UNTENABLE IN LAW AND HAS ABSOLUTELY NO FOUNDATION ON WH ICH IT COULD BE MADE, THE ASSESSEE WOULD NOT BE LIABLE TO IMPOS ITION OF PENALTY, EVEN IF HE WAS NOT ACTING BONAFIDE WHILE MAKING A CLAIM OF THIS NATURE, THAT WOULD GIVE A LICENCE T O ITA NO.486/CHD/2018 A.Y.2012-13 5 UNSCRUPULOUS ASSESSEES TO MAKE WHOLLY UNTENABLE AND UNSUSTAINABLE CLAIMS WITHOUT THERE BEING ANY BASIS F OR MAKING THEM, IN THE HOPE THAT THEIR RETURN WOULD NOT BE PICK ED UP FOR SCRUTINY AND THEY WOULD BE ASSESSED ON THE BASIS OF SELF ASSESSMENT UNDER SECTION 143(1) OF THE ACT AND EVEN IF THEIR CASE IS SELECTED FOR SCRUTINY, THEY CAN GET AWAY MERE LY BY PAYING THE TAX, WHICH IN ANY CASE, WAS PAYABLE BY THEM . THE CONSEQUENCE WOULD BE THAT THE PERSONS WHO MAKE CLAIMS OF THIS NATURE, ACTUATED BY A MALAFIDE INTENTION TO EVA DE TAX OTHERWISE PAYABLE BY THEM WOULD GET AWAY WITHOUT PA YING THE TAX LEGALLY PAYABLE BY THEM, IF THEIR CASES ARE NOT PICKED UP FOR SCRUTINY. THIS WOULD TAKE AWAY THE DETERRENT EFFE CT, WHICH THESE PENALTY PROVISIONS IN THE ACT HAVE. 21. WE FIND THAT THE ASSESSEE BEFORE US DID NOT EXPLA IN EITHER TO THE INCOME TAX AUTHORITIES OR TO THE INCOME TAX APPELLATE TRIBUNAL AS TO IN WHAT CIRCUMSTANCES AND ON ACCOUNT O F WHOSE MISTAKE, THE AMOUNTS CLAIMED AS DEDUCTIONS IN THIS CASE WERE NOT ADDED, WHILE COMPUTING THE INCOME OF THE ASSESSEE COMPANY. WE CANNOT LOSE SIGHT OF THE FACT TH AT THE ASSESSEE IS A COMPANY WHICH MUST BE HAVING PROFESSI ONAL ASSISTANCE IN COMPUTATION OF ITS INCOME, AND ITS ACC OUNTS ARE COMPULSORILY SUBJECTED TO AUDIT. IN THE ABSENCE OF A NY DETAILS FROM THE ASSESSEE, WE FAIL TO APPRECIATE HOW SUCH DE DUCTIONS COULD HAVE BEEN LEFT OUT WHILE COMPUTING THE INCOME OF THE ASSESSEE COMPANY AND HOW IT COULD ALSO HAVE ESCAPED THE ATTENTION OF THE AUDITORS OF THE COMPANY. 5.1.2.3 THE FACTS OF THE CASE CLEARLY SHOW THAT THE APPELLANT WAS AWARE OF THE EXCESS CLAIM OF DEDUCT ION OF 80IC ON INCOME REFERRED SUPRA FOR WHICH THE DEDUCTION W AS CLEARLY NOT ALLOWABLE AND THE LAW WAS SETTLED ON TH IS ISSUE. THE APPELLANT HOWEVER PREFERRED MAKING A EXCE SS CLAIM OF DEDUCTION WHICH TANTAMOUNTS TO NOTHING BUT FURNISHING OF INACCURATE PARTICULARS. ACCORDINGLY, AL L THESE FACTS LEAD TO BE INCONTROVERTIBLE CONCLUSION THAT THE APPELLANT FURNISHED INACCURATE PARTICULARS AND FURNISHED NO S ATISFACTORY EXPLANATION BEFORE THE AO. THE HIGH COURT IN THE CAS E REFERRED SUPRA HAS CLEARLY BROUGHT OUT THAT CLAIMIN G A WRONG DEDUCTION WHICH WAS CLEARLY AND APPARENTLY UNALLOWABL E WOULD INVITE PENALTY U/S 271(1)(C). IN VIEW OF THE A BOVE, THE PENALTY LEVIED BY THE AO ON THE ISSUE OF DISALLOWAN CE OF DEDUCTION U/S 80IC ON THE INCOME REFERRED HEREIN IS ACCORDINGLY UPHELD. 5. THE LD. COUNSEL FOR ASSESSEE THEREAFTER CHALLENG ED THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT ON THE IMPUGNED DISALLOWANCES CONTENDING FIRSTLY THAT THE ITA NO.486/CHD/2018 A.Y.2012-13 6 ISSUE WHETHER THE DISALLOWANCE OF DEDUCTION ON THE IMPUGNED INCOMES WAS WARRANTED OR NOT, WAS DEBATABLE. OUR ATTENTION WAS DRAWN TO THE ORDER OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF M/S TEMA EXCHANGERS MANUFACTURES PVT. LTD. VS. ACIT-10(2), MUMBAI & ANOTHER IN INCOME TAX APPEAL NO.415 OF 2004, WHEREIN, IT WAS POINTED OUT THAT, THE HON'BLE HIGH COURT HAD HELD THAT THE INTEREST INCOME EARNED ON FIXED DEPOSIT WITH THE BANK AND OTHER INTEREST INCOME ARE ELIGIBLE FOR DEDUCTION U/S 80IA OF THE A CT. LD. COUNSEL FOR ASSESSEE POINTED OUT, THAT SECTION 80IA WAS WORDED IDENTICALLY AS SECTION 80IC OF THE ACT, BOTH ALLOWING DEDUCTION OF PROFITS AND GAINS DERIVED FROM ANY BUSINESS OF AN INDUSTRIAL UNDERTAKING (EMPHASIS SUPPLIED BY US). THE LD. COUNSEL FOR ASSESSEE POINT ED OUT THAT IN THE SAID DECISION THE HON'BLE HIGH COUR T HAD DISTINGUISHED THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS. PANDIAN CHEMICALS LTD. , 318 ITR 420 STATING THAT THE SAID DECISION WAS RENDERED IN THE CONTEXT OF SECTION 80HH OF THE ACT WHEREIN THERE WAS A DIFFERENCE IN THE LANGUAGE IMPL IED ALLOWING DEDUCTION OF PROFITS AND GAINS DERIVED FROM INDUSTRIAL UNDERTAKINGS ( EMPHASIS SUPPLIED BY US), AS AGAINST DEDUCTION ALLOWED U/S 80IA ON THE PROFITS AND GAINS DERIVED FROM ANY BUSINESS OF AN INDUSTRIAL UNDERTAKING , (EMPHASIS SUPPLIED BY US), WHICH WAS ITA NO.486/CHD/2018 A.Y.2012-13 7 WIDER IN ITS APPLICATION. IT WAS POINTED OUT THAT T HE HON'BLE HIGH COURT HAD FURTHER HELD THAT THE SAME REASONING WOULD APPLY TO EXTEND DEDUCTION U/S 80IA OF THE ACT TO THE COMPENSATION RECEIVED FOR NON SUPPLY OF SPARE PARTS. THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT THE LD.CIT(A) HAD HEAVILY RELIED UPON THE DECI SION OF THE HON'BLE APEX COURT IN THE CASE OF PANDIAN CHEMICALS LTD. (SUPRA) WHILE HOLDING THAT THE ASSESSEES CLAIM OF DEDUCTION OF THE AFORESAID INCOM ES WAS WHOLLY UNTENABLE IN LAW. THE LD. COUNSEL FOR ASSESSEE STATED THAT IN VIEW OF THE AFORESAID DECIS ION OF THE HON'BLE HIGH COURT OF BOMBAY ON THE DIRECT ISSUE OF INTEREST RECEIVED FROM BANKS AND OTHER INC OME RELATED TO THE BUSINESS OF THE ASSESSEE, IT CAN BE SAFELY SAID THAT THE ISSUE WAS DEBATABLE AND NOT SETTLED BY THE DECISION OF THE HON'BLE APEX COURT I N THE CASE OF PANDIAN CHEMICALS LTD. (SUPRA). COPY OF THE ORDER OF HON'BLE HIGH COURT WAS PLACED BEFORE U S. 6. THE LD. COUNSEL FOR ASSESSEE FURTHER CONTENDED THAT ITS CLAIM OF DEDUCTION WAS ALSO BONAFIDE, HAV ING BEEN CLAIMED ON THE BASIS OF CERTIFICATE FURNISHED BY THE CHARTERED ACCOUNTANT IN THIS REGARD IN FORM NO.10CCB. OUR ATTENTION WAS DRAWN TO THE COPY OF AUDIT REPORT IN FORM NO.10CCB FURNISHED BY THE CHARTERED ACCOUNTANT MENTIONING THE ELIGIBILITY OF THE ASSESSEES CLAIM OF DEDUCTION U/S 80IC OF TH E ACT ITA NO.486/CHD/2018 A.Y.2012-13 8 AMOUNTING TO RS.1,34,37,046/-, PLACED AT PAPER BOOK PAGE NOS.13 TO 18. OUR ATTENTION WAS ALSO DRAWN TO THE RETURN OF INCOME FURNISHED BY THE ASSESSEE FOR THE IMPUGNED YEAR CLAIMING DEDUCTION OF THE SAME AMOUNT , AS STATED IN FORM NO.10CCB, PLACED AT PAPER BOOK PAGE NO.2. THE LD. COUNSEL FOR ASSESSEE CONTENDED, THEREFORE, THAT THE CLAIM BEING BONAFIDE, IT WAS NO T LIABLE TO ANY PENALTY U/S 271(1)(C) OF THE ACT. OUR ATTENTION WAS DRAWN TO THE DECISION OF THE HON'BLE HIGH COURT OF UTTRAKHAND IN THE CASE OF PR.CIT VS. M/S MAHIMA UDYOG IN ITA NO.13 OF 2018 DATED 9.5.2018 POINTING OUT THEREFROM THAT THE HON'BLE H IGH COURT HAD DELETED THE LEVY OF PENALTY ON FINDING TH AT THE ASSESSEE HAD MADE THE CLAIM ON THE BASIS OF CHARTERED ACCOUNTANTS CERTIFICATE AND HELD THAT THOUGH THE A.O. HAD REJECTED THE SAID CLAIM BUT THA T WAS NOT SUFFICIENT TO IMPOSE PENALTY U/S 271(1)(C) OF THE ACT SINCE AS PER LAW, ONLY A FALSE CLAIM OR A C LAIM NOT BONAFIDE, WAS LIABLE TO PENALTY AND THE BONAFI DE OF THE ASSESSEES CLAIM WAS PROVED BY THE AUDITORS CERTIFICATE. COPY OF THE ORDER WAS PLACED BEFORE US . 7. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE CIT(A) AND FURTHER POINTED OUT THAT TH E ASSESSEE HAD NOT PRESSED THE LEVY OF PENALTY ON THE SE ISSUES BEFORE THE CIT(A) AND, THEREFORE, COULD NOT BE SAID TO BE AGGRIEVED BY THE ORDER OF THE LD.CIT(A). OUR ITA NO.486/CHD/2018 A.Y.2012-13 9 ATTENTION WAS DRAWN TO THE FINDINGS OF THE LD.CIT(A ) IN THIS REGARD AT PARA5.1.2 STATING THE SAID FACT. 8. TO THIS LD.COUNSEL FOR THE ASSESSEE COUNTERED BY STATING THAT THE ASSESSEE HAD NOT AGITATED THE IMPUGNED PENALTY SINCE IT THOUGHT IT FIT TO CHALLEN GE ONLY THE SUBSTANTIAL PORTION OF THE TOTAL PENALTY LEVIED AND NOT PRESS THE IMMATERIAL /SMALL QUANTUM OF THE SAME. LD.COUNSEL POINTED OUT FROM THE PENALTY ORDER AND THE ASSESSMENT ORDER PASSED IN THE PRESEN T CASE, THAT PENALTY HAD ALSO BEEN LEVIED ON ACCOUNT OF THE RESTRICTION OF DEDUCTION U/S 80IC OF THE ACT CLAIMED BY IT @ 100% OF ITS BUSINESS PROFITS ON ACCOUNT OF SUBSTANTIAL EXPANSION UNDERTAKEN BY IT, TO 25% THEREOF. IT WAS POINTED OUT THAT THE SAME HAD RESULTED IN ADDITION TO ITS INCOME OF RS.1,00,77,78 4/- ON WHICH PENALTY @ 30% ,BEING 100% OF THE TAX SOUGH T TO BE EVADED, AMOUNTED TO APPROX. RS.30 LACS, WHILE THE TOTAL PENALTY LEVIED WAS OF RS.32,53,680/-. AND THE ASSESSEE IN ITS WISDOM HAD THOUGHT IT FIT TO CHALL ENGE ONLY THE SAME, FINDING IT DIRECTLY COVERED IN ITS F AVOUR BY THE ORDER OF THE ITAT IN THE CASE OF HYCRON ELECTRONICS ITA NO.326/CHD/2015,WHEREIN IDENTICAL PENALTY WAS DELETED AND FURTHER FINDING IT COVERED IN ITS FAVOUR ON THE QUANTUM DISALLOWANCE MADE, BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF M/S STOVEKRAFT INDIA VS CIT ITA NO.20/2015 DT.28.11.2017. HE CONTENDED THEREFORE THAT THE ITA NO.486/CHD/2018 A.Y.2012-13 10 ASSESSEE HAD NOT CONCEDED THAT THE PENALTY HAD BEEN RIGHTLY LEVIED ,BY VIRTUE OF THE AGREEMENT, AND COU LD VERY WELL CHALLENGE THE LEVY OF THE SAME BEFORE US. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF AUTHORITIES BELOW AND ALSO GONE THROU GH THE CASE LAWS PLACED BEFORE US. THE ISSUE BEFORE US RELATES TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME/CONCEALING PARTICULARS INCOME IN RELATION TO DISALLOWANCE OF CLAIM OF DEDUCTION U/S 80IC OF THE ACT ON THE FOLLOWING INCOMES: 1) DISCOUNT RECEIVED = RS.1,13,476/- 2) INTEREST = RS.3,27,898/- 3) PROCESS CHARGES = RS.10,550/- 10. BEFORE PROCEEDING TO DEAL WITH THE MERITS OF TH E CASE, WE SHALL FIRST BE DEALING WITH THE CONTENTION OF THE LD. DR THAT THE ASSESSEE COULD NOT HAVE CHALLENGED THE CONFIRMATION OF LEVY OF PENALTY ON T HE ABOVE, SINCE THE SAME WAS NOT PRESSED BEFORE THE LD.CIT(A). 11. WE ARE NOT IN AGREEMENT WITH THE CONTENTION OF THE LD. DR. THE ISSUE RELATES TO LEVY OF PENALTY. T HIS OBVIOUSLY IS NOT A CASE OF QUANTUM ADDITION BUT RELATES TO PENAL PROCEEDINGS, BY HOLDING THE ASSESS EE GUILTY OF AN OFFENCE, WHICH IN THE PRESENT CASE IS OF CONCEALING/FURNISHING INACCURATE PARTICULARS OF INCOME. HENCE IN OUR VIEW, THOUGH THE ASSESSEE MAY ITA NO.486/CHD/2018 A.Y.2012-13 11 HAVE AGREED TO THE LEVY OF PENALTY ON THE IMPUGNED ISSUES, MAYBE CONSIDERING THE SMALLNESS OF THE AMOU NT INVOLVED BEFORE THE LD.CIT(A), HE CANNOT BE DEBARRE D FOR THAT REASON FROM CHALLENGING THE SAME AND PLEADING HIS INNOCENCE, BEFORE A HIGHER APPELLATE AUTHORITY. FURTHER, WE FIND, THAT THE LD.CIT(A) HAS NOT UPHELD THE PENALTY SOLELY FOR THE REASON THAT THE ASSESSEE DID NOT AGITATE THE SAME BUT HAS ALSO EXHAUSTIVELY DEALT WITH THE SAME ON MERITS ALSO. THEREFORE CLEARLY THERE IS NO PREJUDICE CAUSED TO THE REVENUE ON ACCOUNT OF THE ASSESSEE NOT CHALLENGIN G THE PENALTY BEFORE THE CIT(A).WE THEREFORE DISMISS THIS CONTENTION OF THE LD.DR. 12. NOW DEALING WITH THE MERITS OF THE CASE WE ARE IN AGREEMENT WITH THE LD. COUNSEL FOR ASSESSEE THAT TH ERE WAS NO CASE FOR LEVY OF PENALTY SINCE THE ASSESSEE HAD ESTABLISHED THE BONAFIDES OF ITS CLAIM BY DEMONSTRATING THAT IT HAD CLAIMED THE SAID DEDUCTIO N ON THE BASIS OF THE CERTIFICATE OF A PROFESSIONAL , BEING A CHARTERED ACCOUNTANT, FURNISHED IN THE FORM PRESCRIBED BY THE INCOME TAX RULES IN THIS REGARD. LD.DR HAS NOT CONTROVERTED THE SAID FACT BEFORE US. THE RELIANCE PLACED BY THE LD. COUNSEL FOR ASSESSEE ON THE DECISION OF THE HON'BLE UTTRAKHAND HIGH COURT I N THE CASE OF M/S MAHIMA UDYOG (SUPRA) IS APT WHEREIN ON IDENTICAL SET OF FACTS, WHERE THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80IC OF THE ACT ON THE BASIS OF ITA NO.486/CHD/2018 A.Y.2012-13 12 THE CERTIFICATE FURNISHED IN FORM NO.10CCB, WHICH W AS DISALLOWED AND ON WHICH PENALTY WAS LEVIED, THE HON'BLE HIGH COURT HAD HELD THAT THE CLAIM OF THE ASSESSEE WAS BONAFIDE AND THUS NOT LIABLE TO PENALT Y. THE RELEVANT FINDINGS AT PARAS 8 TO 10 OF THE ORDER IS AS UNDER: THEREFORE, MERE MAKING OF CLAIM WHICH IS FOUND TO BE NOT SUSTAINABLE IN LAW WILL NOT AMOUNT TO FUR NISHING INADEQUATE PARTICULARS. NO DOUBT, THE QUESTION OF BON A FIDE MAY ARISE HAVING REGARD TO CLAUSE (B) OF THE EXPLANAT ION, IN OTHER WORDS, IF THE CLAIM IS MADE, IT IS FOR THE A SSESSEE TO MAKE GOOD HIS CLAIM ATLEAST BY POINTING OUT THAT IT IS MADE BONA FIDE. IN THIS CASE, THE ASSESSEE HAS PROCEEDED TO MAKE CLAIM ON THE BASIS OF THE CHARTERED ACCOUNTANT CERT IFICATE, ACCORDING TO WHICH, THE CLAIM WAS JUSTIFIED. IT MAY BE TRUE THAT THE ASSESSING OFFICER HAS REJECTED THE REVISED RETURN, WHEREIN, PART OF THE CLAIM SOUGHT TO BE LAID AT THE DOORSTEP OF SECTION 80IC WAS REJECTED AND THE ORDER OF THE ASSE SSING OFFICER HAS ALSO BECOME FINAL; BUT THAT ALSO MAY NO T SUFFICE TO IMPOSE PENALTY UNDER SECTION 271(1 )(C) OF THE ACT, AS WHAT THE LAW CONTEMPLATES IS MAKING OF A FALSE C LAIM OR A CLAIM WHICH IS NOT BONA FIDE. NO QUESTION OF LAW H AS BEEN RAISED REGARDING THE FINDING ABOUT THE BONA FIDE OF THE ASSESSEE'S CLAIM BEING PROVED BY THE AUDITOR CERTIF ICATE AND THE DISCUSSION OF THE MATTER BY THE COMMISSIONE R (APPEALS) WHICH FOUND FAVOUR WITH THE TRIBUNAL. THEREFORE, WE NEED NOT ANSWER THE QUESTION OF LAW W HICH IS RAISED. 10. THEREFORE, IN THESE CIRCUMSTANCES, WE DO NOT DEEM IT NECESSARY TO ANSWER THE QUESTION WHICH HAS BEEN RAISED ON THE GROUND THAT EVEN WITHOUT GOING INTO T HE QUESTION WHICH HAS BEEN RAISED, THE ORDER OF THE TR IBUNAL IS ONLY TO BE UPHELD. WE DO SO AND THE APPEAL WILL STA ND DISMISSED. 13. FURTHER, WE ALSO AGREE WITH THE LD. COUNSEL FOR ASSESSEE THAT THE ISSUE OF ALLOWANCE OF DEDUCTION U /S 80IC OF THE ACT ON THE IMPUGNED INCOMES WAS A DEBATABLE ISSUE AND NOT A SETTLED ISSUE AGAINST THE ASSESSEE AS HELD BY THE LD.CIT(A). THE FINDINGS OF THE LD.CIT(A) THAT THE CLAIM OF THE ASSESSEE WAS UNTENA BLE ITA NO.486/CHD/2018 A.Y.2012-13 13 IN LAW, WE FIND, WAS BASED ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF PANDIAN CHEMICALS LTD. (SUPRA), WHICH, AS HAS BEEN RIGHTLY POINTED OU T BY THE LD.COUNSEL FOR THE ASSESSEE BEFORE US HAS BEEN DISTINGUISHED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF TEMA EXCHANGERS MANUFACTURES PVT. LTD. (SUPRA), WHEREIN IT WAS HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IA/80IB, ON THE INTERES T EARNED FROM BANKS AND OTHER SUCH INCOMES, BEING IN THE NATURE OF PROFITS DERIVED FROM THE BUSINESS OF THE INDUSTRIAL UNDERTAKINGS AND THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF PANDIAN CHEMICALS LTD. (SUPRA) WOULD NOT APPLY SINCE IT WAS RENDERED IN TH E CONTEXT OF THE SECTION 80HH OF THE ACT WHEREIN THE WORD USED WAS PROFITS AND GAINS DERIVED FROM THE INDUSTRIAL UNDERTAKING . THEREFORE, WE DO NOT AGREE WITH THE REVENUE THAT THE ASSESSEE HAD KNOWINGLY MADE A CLAIM WHOLLY UNTENABLE IN LAW AND THUS CONCEALED/FURNISHED INACCURATE PARTICULARS OF INCOM E SO AS TO ATTRACT LEVY OF PENALTY U/S 271(1)(C) OF T HE ACT. 14. IN VIEW OF THE ABOVE, WE HOLD THAT ,THE ISSUE O N WHICH PENALTY WAS LEVIED, BEING DEBATABLE AND EVEN OTHERWISE THE CLAIM OF THE ASSESSEE BEING BONAFIDE, THE ASSESSEE COULD NOT BE CHARGED WITH HAVING CONCEALED/FURNISHED ANY INACCURATE PARTICULARS OF ITA NO.486/CHD/2018 A.Y.2012-13 14 INCOME SO AS TO ATTRACT LEVY OF PENALTY U/S 271 OF THE ACT. THE PENALTY SO LEVIED IS DIRECTED TO BE DELETE D. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- % & ' ($ (SANJAY GARG) (ANNAPURNA GUPTA) /JUDICIAL MEMBER )* /ACCOUNTANT MEMBER ,% /DATED: 15 TH FEBRUARY, 2019 * $ * ''()*+*% / COPY OF THE ORDER FORWARDED TO : 1. , / THE APPELLANT 2. (-, / THE RESPONDENT 3. . / CIT 4. . ( )/ THE CIT(A) 5. */0(1 , 1& , 23405 / DR, ITAT, CHANDIGARH 6. 046 / GUARD FILE '' / BY ORDER, / ASSISTANT REGISTRAR