Deputy Commissioner of Income-tax, V. M/s. Weikfield I T Citi Info Park, Pune

ITA 737/PUN/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2668 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAZHAR AKRAM
• Assessee Lawyers: HARI KRISHAN HARI KRISHAN
• Keywords: Bonafide belief; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , A M . / ITA NO. 737 /PN/201 4 / ASSESSMENT YEAR : 20 0 9 - 1 0 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 2, PUNE . / APPELLANT VS. M/S. WEIKFIELD IT CITI INFO PARK, 201, PHONEI, BUND GARDEN ROAD, OPP. RESIDENCY CLUB, P UNE 411001 . / RESPONDENT / APPELLANT BY : SHRI MAZHAR AKRAM / RESPONDENT BY : S /S HRI DHARMESH SHAH AND HARI KRISHAN HARI KRISHAN / DATE OF HEARING : 31 . 1 2 .201 5 / DATE OF PRONOUNCEMENT: 10 . 0 3 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT (A) - II , PUNE , DATED 12 . 1 2 .20 1 3 RELATING TO ASSESSMENT YEAR 20 0 9 - 1 0 IN DELETING PENALTY LEVIED UNDER SECTION 271(1)(C) OF T HE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 . THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE PENALTY U/S. 271(1)(C) WITHOUT EXAMINING THE FACTS & EVIDENCE S AVAILABLE ON RECORD AND BROUGHT OUT BY THE ASSESSING OFFICER IN THE PENALTY ORDER IN SUPPORT OF LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. ITA NO. 737 /PN/20 1 4 M/S. WEIKFIELD IT CITI INFO PARK 2 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE PENALTY ON THE PREMISE THAT THE ASSESSEE HAD CORRECTLY FILED THE RETURN AND ALL THE MATERIAL FACTS WERE BROUGHT ON RECORD, DE HORS HIS FINDINGS IN PARA 3.4 OF HIS ORDER THAT THE ASSESSEE HAD CONSTRUCTED AN EXTRA FLOOR IN CONTRAVENTION TO THE APPROVAL GRANTED BY CBDT FOR GROUND PLUS EIGHT FLOORS. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN IGNORING THE FACT THAT THE EXCESS CLAIM OF DEDUCTION U/S.80IA WAS CONSCIOUS AND DELIBERATE AS IT WAS WELL WITHIN THE KNOWLEDGE OF THE ASSESSEE THAT IT PARK CONSTRUCTED BY IT WAS NOT AS PER THE NOTIFICATION OF CBDT AND THUS CONCEALED THE PARTICULARS OF INCOME. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ABOVE PENALTY ON THE INCORRECT PREMISE THAT EVEN IF AN ADMITTEDLY INCORRECT CLAIM IS MADE IN THE RETURN OF INCOME BUT THE MATERIAL FACTS ARE DISCLOSED DURING THE ASSESSMENT PROCEEDINGS, NO SUCH PENALTY WAS LEVIABLE. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OR ALL THE GROUNDS OF APPEAL. 3 . THE ISSUE RAISED IN THE PRESENT APPEAL FILED BY THE REVENUE IS AGAINST DELETION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE IS AN AOP, WHO HA D DECLARED INCOME FROM BUSINESS , COMMISSION INCOME AND INCOME FROM OTHER SOURCES. THE ASSESSEE HAD FURNISHED RE TURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,75,03,140/ - . THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF DEVELOPING AN INDUSTRIAL PARK DULY APPROVED BY THE MINISTRY OF COMMERCE & INDUSTRY UNDER INDUSTRIA L PARK SCHEME, 2002 AND DULY NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD CLAIMED DEDUCTION OF RS. 6,71,40,572/ - UNDER SECTION 80IA(IV) OF THE ACT ON THE SALE OF INDUSTRIAL PARK. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISHED DETAILS OF SALES MADE DURING THE YEAR, WHICH CONSTITUTE OF RELEASE OF AMOUNT OUT OF SALES MADE IN THE EARLIER YEARS TOTALING RS. 2.29 CRORES, SALE OF GROUND FLOOR OF THE INFO CITI PARK AT RS. 5.97 CRORES AND SA LE OF 9 TH FLOOR OF THE INFO CITY PARK AT RS. 2.54 CRORES. THE ASSESSEE FURNISHED THE DETAILS OF INFO CITI ITA NO. 737 /PN/20 1 4 M/S. WEIKFIELD IT CITI INFO PARK 3 PROJECT I.E. DATE OF APPROVAL, AREA OF PROJECT , NOTIFICATION GIVEN BY THE CBDT AND THE DEPARTMENT OF INDUSTRIAL POLICY PROMOTION. ON VERIFICATION OF THE DETAILS, THE ASSESSING OFFICER NOTED THAT THE CBDT VIDE NOTIFICATION DATED 14.09.2006 HAD NOTIFIED THE INDUSTRIAL PARK HAVING AREA OF 61,780 SQ. MTRS. AND HAVING MINIMUM NUMBER OF 30 UNITS. THE ASSESSEE HAD SOLD THE ENTIRE PROJECT TO M/S. N.V. REALTY P VT. LTD. CONSISTING OF TWO FLOORS OF PARKING AND CONFERENCE HALL PLUS 8 FLOORS. THE FIRST FLOOR HAD TWO INDUSTRIAL UNITS AND THE REMAINING 7 FLOORS HAD 4 INDUSTRIAL UNITS UPTO 8 TH FLOOR. HOWEVER, DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD CONV ERTED THE UNITS ON THE GROUND FLOOR INTO TWO INDUSTRIAL UNITS BY CREATING A PARTITION. FURTHER, THE ASSESSEE HAD CONSTRUCTED TWO UNITS O N THE 9 TH FLOOR. SINCE THE APPROVAL FOR CONSTRUCTION OF TWO UNITS AT 9 TH FLOOR WAS TAKEN AFTER 28.02.2006 I.E. AFTER C OMPLETION OF INDUSTRIAL PARK, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SAME COULD NOT BE REGARDED AS PART OF INDUSTRIAL PARK AND HENCE, THE DEDUCTION UNDER SECTION 80IA OF THE ACT ON SALE OF 9 TH FLOOR COULD NOT BE ALLOWED. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID CLAIM OF DEDUCTION UNDER SECTION 80IA OF THE ACT SHOULD BE ALLOWED TO IT. THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER SINCE THE ASSESSEE HAD CONSTRUCTED INDUSTRIAL UNIT AT 9 TH FLOOR AFTER COMPLETION OF INDUSTRIAL PARK AS APPROVED BY CBDT AND HENCE, THE PORTION ON 9 TH FLOOR OF THE PROJECT COULD NOT BE REGARDED AS PART OF THE PROJECT. THE ASSESSING OFFICER THUS, DISALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 80IA OF THE ACT TO THE EXTENT OF RS. 53,79, 539/ - . FURTHER, THE ADDITION WAS MADE IN THE HANDS OF ASSESSEE FOR NON - DEDUCTION OF TAX AT SOURCE TO THE EXT ENT OF RS. 1,33,102/ - BY APPLYING PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C) OF THE ACT IN RESPECT OF BOTH THE ADDITIONS FOR FURNISHING IN ACCURATE PARTICULARS OF INCOME. DURING PENALTY PROCEEDINGS, THE CLAIM OF THE ASSESSEE WAS THAT IT HAD MADE COMPLETE DISCLOSURE ABOUT THE NATURE OF CLAIM MADE AND HENCE, THE PROVISIONS OF SECTION ITA NO. 737 /PN/20 1 4 M/S. WEIKFIELD IT CITI INFO PARK 4 271(1)(C) OF THE ACT WERE NOT ATTRACTED. RELIANCE IN THIS REGARD WAS PLACED UPON THE DECISION OF HONBLE SUPREME COURT IN CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC) . IT WAS FURTHER POINTED OUT BY THE ASSESSEE THAT AS PER EX PLANATION (1) TO SECTION 271(1)(C) OF THE ACT , PENALTY COULD BE LEVIED IN A CASE WHERE THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND TO BE FALSE. FURTHER, PENALTY MAY ALSO BE LEVIED WHEN PERSON OFFERS AN EXPLANATION, W HICH HE IS NOT ABLE TO SUBSTANTIATE AND FURTHER FAILS TO PROVE THAT SUCH EXPLANATION WAS BONAFIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIALS TO THE COMPUTATION HAVE BEEN DISCLOSED BY HIM. THE CLAIM OF THE ASSESSEE WAS THAT THE ONUS TO PROVE THAT THE PROVISIONS ARE APPLICABLE WAS ON THE ASSESSING OFFICER. FURTHER, RELIANCE WAS PLACED ON SEVERAL DECISIONS BEFORE THE ASSESSING OFFICER . T HE REPLY OF THE ASSESSEE IS INCORPORATED UNDER PARA 2 AT PAGES 2 TO 8 OF THE ORDER LEVYING PENALTY UNDER SE CTION 271(1)(C) OF THE ACT. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE CASE LAWS RELIED UPON BY THE ASSESSEE WERE NOT APPLICABLE. IT WAS FURTHER OBSERVED BY THE ASSESSING OFFICER VIDE PARA 5 THAT THE ASSESSEE WAS AWARE THAT THE CBDT HAD APPROVED THE PROJECT AS GROUND PLUS 8 FLOORS , SINCE THE 9 TH FLOOR WAS NOT APPROVED BY THE CBDT AND HENCE, THE SAME COULD NOT BE PART OF THE PROJECT. THE ASSESSEE HOWEVER, CONSTRUCTED 9 TH FLOOR AND CLAIMED DEDUCTION UNDER SECTION 80IA OF THE ACT , WHICH ACT OF THE ASSES SEE WAS DELIBERATE VIOLATION OF PROVISIONS OF SECTION 80IA OF THE ACT. IN VIEW THEREOF, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE SAID CONCEALED INCOME @ 100% AND PENALTY WAS LEVIED AT RS.18,03,220/ - . 5. THE CIT(A) CO NSIDER ED THE EXPLANATION OF ASSESSEE AND RELIANCE O N SEVERAL DECISIONS AND MAIN EMPHASIS OF THE ASSESSEE THAT IT HAD FURNISHED COMPLETE PARTICULARS OF INCOME AND EXPENSES RELATING TO THE PROJECT AND THE CLAIM OF DEDUCTION WAS MADE UNDER THE BONAFIDE BELIEF THAT IT WAS ELIGIBLE FOR ITA NO. 737 /PN/20 1 4 M/S. WEIKFIELD IT CITI INFO PARK 5 DEDUCTION IN RESPECT OF ENTIRE PROJECT OF IT PARK CONSTRUCTED BY IT. THE CIT(A) WAS OF THE VIEW THAT DISPUTE WAS RELATED TO THE CLAIM OF DEDUCTION FOR INDUSTRIAL UNITS CONSTRUCTED ON 9 TH FLOOR OF IT PARK. THE CIT(A) CONSIDERED T HE CONTENTION OF ASSESSEE THAT NOTIFICATION OF CBDT REFERS TO MINIMUM NUMBER OF INDUSTRIAL UNITS AND NO RESTRICTION WAS GIVEN IN THE APPROVAL GRANTED IN R ESPECT OF PARK. THE CIT(A) WAS OF THE VIEW THAT THE SAID EXPLANATION PRIMA FACIE APPEARS TO BE CORREC T ON PERUSAL OF THE SAID NOTIFICATION. FURTHER, THE CONTENTION OF THE ASSESSING OFFICER THAT THE APPROVAL OF IT PARK WAS FOR GROUND PLUS 8 FLOORS BY THE CBDT, WAS ALSO FOUND TO BE TRUE FROM THE MATERIAL ON RECORD. THE CIT(A) NOTED THAT THE ACCOUNTS OF AS SESSEE WERE SUBJECT TO AUDIT AND NO ADVERSE COMMENT IN THIS REGARD, WAS MADE. AS AGAINST THE TOTAL CLAIM OF DEDUCTION OF RS. 6,71,40,572/ - UNDER SECTION 80IA(IV) OF THE ACT, THE CIT(A) NOTED THAT THE ASSESSING OFFICER HAD DISALLOWED THE CLAIM TO THE EXTENT OF RS. 53,79,539/ - ONLY. THE CIT(A) WAS OF THE VIEW THAT WHERE THE ASSESSEE HAD DISCLOSED ENTIRE FACTS WITH RESPECT TO CLAIM OF DEDUCTION UNDER SECTION 80IA OF THE ACT IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION AND HAD ALSO FURNISHED N ECESSARY EVIDENCES WHICH WERE MATERIAL TO THE COMPUTATION OF INCOME, THEN THE ASSESSEE CAN BE HELD TO HAVE FULLY AND TRULY DISCLOSED ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT AND FOR DETERMINING THE ELIGIBILITY OF CLAIM OF DEDUCTION UNDER SECTION 80I A OF THE ACT DURING THOSE YEARS . THE CIT(A) FURTHER HELD THAT THE DISALLOWANCE MADE DOES NOT IPSO FACT O LEAD TO LEVY OF PENALTY FOR CONCEALMENT AND WHERE THE ASSESSEE HAD DISCLOSED ALL THE MATERIAL FACTS RELEVANT FOR ITS ASSESSMENT AND THE ISSUE WAS A DEB ATABLE VIS - - VIS THE CLAIM OF DEDUCTION PROVIDED UNDER THE STATUTE AND HENCE, WAS CLEARLY OUTSIDE THE SCOPE OF EXPLANATION (1) TO SECTION 271(1)(C) OF THE ACT. WHERE THE ASSESSEE HAD DISCLOSED ALL THE MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT AND THE ON LY QUESTION WAS WITH REGARD TO INTERPRETATIO N OF RELEVANT PROVISIONS OF LAW ALLOWING DEDUCTION TO THE ASSESSEE UPON FULFILLING CERTAIN CONDITIONS, THE CIT(A) HELD THAT ITA NO. 737 /PN/20 1 4 M/S. WEIKFIELD IT CITI INFO PARK 6 THERE WAS NO MATERIAL TO SUGGEST THAT THE ASSESSEE HAD NOT DISCLOSED ANY RELEVANT PARTIC ULARS OR FACTS BEFORE THE AUTHORITY AND HAD NOT ACTED BONAFIDELY, HENCE, THE CIT(A) HELD THAT NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT , WAS LEVIABLE . RELIANCE WAS PLACED ON SERIES OF DECISIONS FOR THE SAID PROPOSITION AND IT WAS HELD THAT AT BEST IT WAS A CASE OF INCORRECT READING OF LAW OR FAILURE TO APPLY THE SAME CORRECTLY, WHICH AS PER THE CIT(A), COULD NOT ATTRACT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT, HENCE, THE SAME WAS DELETED. 6. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. 8. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER WAS OF THE VIEW THAT WHERE THE PERMISSION WAS FOR CONSTRUCTION OF UNITS ON GROUND PLUS 8 FLOORS, THEN THE PROFITS RELATING TO THE UNITS OF 9 TH FLOOR WERE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(IV) OF THE ACT AND HENCE, DEDUCTION TO THE EXTENT OF ABOUT RS.53 LAKHS WAS DENIED TO THE ASSESSEE AND THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME. OUR ATTENTION WAS DRAWN TO THE APPLICATION MOVED BY THE ASSESSEE BEFORE THE MINISTRY OF COMMERCE I.E. APPLICATION FOR SETTING UP OF INDUSTRIAL PARK, WH ICH IS PLACED AT PAGES 4 TO 9 OF THE PAPER BOOK. REFERRING TO PAGE 7 OF THE PAPER BOOK, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE PROPOSED ALLOCABLE AREA OF INDUSTRIAL PARK WAS 49,450 SQ. MTRS., OUT OF TOTAL AREA OF 61,78 0 . FURTHER, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE APPROVAL GRANTED BY THE MINISTRY OF COMMERCE & INDUSTRY, COPY OF WHICH IS PLACED AT PAGES 10 TO 14 OF THE PAPER BOOK , POINTED OUT THAT THE PROPOSED AREA OF ITA NO. 737 /PN/20 1 4 M/S. WEIKFIELD IT CITI INFO PARK 7 INDUSTRIAL PARK WAS 61,780 SQ. MTRS. AND PERMISSION WAS GIVEN TO THE ASSESSEE TO CONSTRUCT INDUSTRIAL PARK. THE CBDT VIDE NOTIFICATION DATED 14.09.2006 ALSO NOTIFIED THE DEVELOPMENT OF INDUSTRIAL PARK BY THE ASSESSEE AND NOTIFIED THAT THE UNDERTAKING BEING DEVELOPED AND MAINTAINED AND OPERATED BY THE ASSESSEE AS AN INDUSTRIAL PARK . F OR THE PURPOSE OF CLAUSE ( 3 ) TO SECTION 80IA(IV) OF THE ACT , AREA OF INDUSTRIAL PARK WAS 61,780 SQ. MTRS. AND THE MINIMUM NUMBER OF INDUSTRIAL UNITS WERE 30 UNITS . THE LEARNED AUTHORIZED REP RESENTATIVE FOR THE ASSESSEE REFERRED TO ANOTHER APPLICATION MOVED BEFORE THE MI NISTRY OF COMMERCE AND INDUSTRY, WHICH IS PLACED AT PAGES 19 TO 21 OF THE PAPER BOOK, WHICH WAS FILED ON 07.05.2007 , UNDER WHICH THE PROPOSED AREA OF INDUSTRIAL PARK WAS 51,096 SQ. MTRS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE SAID APPLICATION MOVED BY THE ASSESSEE WAS THE SEPARATE APPLICATION IN RESPECT OF WING NOS.B AND C AND WERE NOT REVISED APPLICATION OF THE ASSESSEE EARLIER FILED AND AL SO IT WAS NOT RELEVANT TO DECIDE THE ISSUE BEFORE US. FURTHER, OUR ATTENTION WAS DRAWN TO UNIT - WISE DETAILS OF INDUSTRIAL PARK OF THE ASSESSEE PLACED AT PAGES 22 AND 23 OF THE PAPER BOOK, WHEREIN 33 UNITS WERE ENLISTED AND ON 9 TH FLOOR , THERE WERE TWO UNI TS AND TOTAL AREA OF UNITS OF EACH FLOOR OF ALL THE FLOORS WAS 4,84,898 SQ. FT. EQUIVALENT TO 45048 SQ. MTRS. THE ASSESSEE EXPLAINED THAT THE PROPOSED AREA OF INDUSTRIAL PARK WAS 61780 SQ. MTRS. AND THE ASSESSEE CLAIMED THAT THE PROFITS ARISING FROM THE S AID PORTION WERE ALSO ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(IV) OF THE ACT. HOWEVER, ON THE REWORKING OF DEDUCTION UNDER SECTION 80IA(IV) OF THE ACT, NO APPEAL WAS FILED AGAINST THE ORDER OF ASSESSING OFFICER. HOWEVER, DEDUCTION WAS OTHERWISE ALLOWAB LE TO THE ASSESSEE. HE FURTHER STATED THAT IN SUCH CIRCUMSTANCES, THE DENIAL OF DEDUCTION UNDER SECTION 80IA(IV) OF THE ACT COULD NOT TANTAMOUNT TO CONCEALMENT OR F URNISHING I NACCURATE PARTICULARS OF INCOME . RELIANCE IN THIS REGARD WAS PLACED ON RATIO LA ID DOWN BY THE HONBLE SUPREME COURT IN CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) AND THE HONBLE ITA NO. 737 /PN/20 1 4 M/S. WEIKFIELD IT CITI INFO PARK 8 RAJASTHAN HIGH COURT IN CIT VS. HARSHVARDHAN CHEMICALS AND MINERALS LTD. (2003) 259 ITR 212 (RAJ) AND ALSO DECISION OF PUNE BENCH OF TRIBUNAL IN ITO V S. SHARADA CONSTRUCTION & INVESTMENT COMPANY (2014) 50 TAXMANN.COM 331 (PUNE TRIB) . 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING BEFORE US IS WITH REGARD TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE SAID SECTION 271(1)(C) OF THE ACT HAS TWO LIMBS I.E. PENALTY FOR CONCEALMENT COULD BE LEVIED UPON THE ASSESSEE WHERE HE HAS CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. IN ORDER TO ATTRACT LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT, IT HAS TO BE ESTABLISHED THAT THE ASSESSEE HAS CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. IN CASE EITHER OF TWO CONDITIONS ARE NOT FULFILLED, IT CANNOT BE HELD THAT THE ASSESSEE IS EXIGIBLE TO LEVY OF PENALTY UNDER SECTIO N 271(1)(C) OF THE ACT. FURTHER, EXPLANATION (1) TO SECTION 271(1)(C) OF THE ACT ALSO LAYS DOWN CERTAIN FURTHER, EXPLANATION (1) TO SECTION 271(1)(C) OF THE ACT ALSO LAYS DOWN CERTAIN CONDITIONS, UNDER WHICH PENALTY FOR CONCEALMENT COULD BE LEVIED UPON THE ASSESSEE. HOWEVER, WHERE THE ASSESSEE HAD MADE A CLAIM, WHICH AS PER HIM, WAS BONAFI DE AND COMPLETE PARTICULARS W ITH REGARD TO IT HAD BEEN FURNISHED BY THE ASSESSEE, THEN IN SUCH CIRCUMSTANCES, MERELY BECAUSE THE CLAIM OF THE ASSESSEE HAS BEEN REJECTED AND ADDITION HAS BEEN MADE IN THE HANDS OF ASSESSEE, THE QUESTION IS WHETHER THE ASSESSEE CAN BE HELD TO BE LIABLE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 10. THE HONBLE SUPREME COURT IN CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) HAVE HELD AS UNDER: - WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTER'S DICTIONARY, THE WORD 'INACCURATE' HAS BEEN DEFINED AS : ITA NO. 737 /PN/20 1 4 M/S. WEIKFIELD IT CITI INFO PARK 9 'NOT ACCURATE, NOT EXACT OR CORRECT ; NOT ACCORDING TO TRUTH ; ERRONEOUS ; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT.' WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTICULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE N OT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEI NG THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASS ESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. 11. THE PROPOSITION LAID DOWN BY THE HONBLE SUPREME COURT WAS THAT MERELY BECAUSE THE CLAIM MADE BY THE ASSESSEE WAS FOUND TO BE INCORRECT, DOES NOT TANTAMOUNT TO FURNISHI NG OF INACCURATE PARTICULARS OF INCOME. THE HONBLE SUPREME COURT FURTHER HELD THAT THERE WAS NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT WAS ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF I TS INCOME. IT WAS FURTHER HELD THAT IN ORDER TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN OF INCOME MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. IN ORDER TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT, TH ERE SHOULD BE A FINDING THAT THE DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE AND MERELY BECAUSE , THE CLAIM HAD BEEN MADE BY THE ASSESSEE , WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF, WOULD NOT AMOUNT TO FUR NISHING OF INACCURATE PARTICULARS OF INCOME. FURTHER, THE SAID PRINCIPLE HAS BEEN APPLIED BY SEVERAL HONBLE HIGH COURTS AND ALSO PUNE BENCH OF TRIBUNAL IN ITO VS. SHARADA CONSTRUCTION & INVESTMENT COMPANY (SUPRA) . THE TRIBUNAL HELD THAT MERELY BECAUSE D EDUCTION WAS DISALLOWED UNDER SECTION 80IA OF THE ACT, AS AGAINST WHICH, THE ASSESSEE HAD MADE DISCLOSURE BY WAY OF FURNISHING THE FACTS AND MATERIALS IN THE COMPUTATION OF INCOME AND WHERE NO INFORMATION OR STATEMENT GIVEN BY THE ASSESSEE IN THE RETURN OF INCOME OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WAS FOUND TO ITA NO. 737 /PN/20 1 4 M/S. WEIKFIELD IT CITI INFO PARK 10 BE FACTUALLY INCORRECT OR INACCURATE, CASE OF THE ASSESSEE COULD NOT BE SAID TO BE CASE OF CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, P ENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT WAS DELETED. 12. NOW, COMING TO THE FACTS OF THE PRESENT CASE, WE FIND THAT THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF SETTING UP OF INDUSTRIAL PARK AND THE PROFITS ARISING FROM SUCH ACTIVITY WERE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(IV) OF THE ACT. FOR THE PURPOSE OF DEVELOPMENT OF INDUSTRIAL PARK, THE ASSESSEE NEEDS TO OBTAIN PERMISSION FROM THE MINISTRY OF COMMERCE & INDUSTRY IN THIS REGARD. THE ASSESSEE FILED AN APPLICATION BEFORE THE MIN ISTRY OF COMMERCE & INDUSTRY AND IN THE SAID APPLICATION, THE ASSESSEE VERY CLEARLY MENTIONED THAT IT WAS PROPOSING TO CONSTRUCT 61,780 SQ. MTRS. IN THE SAID BUILDING, AGAINST WHICH IT WAS ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80IA(IV) OF THE ACT. THE COPY OF THE SAID APPLICATION MADE BY THE ASSESSEE IS AVAILABLE OF THE ACT. THE COPY OF THE SAID APPLICATION MADE BY THE ASSESSEE IS AVAILABLE ON RECORD. THE CBDT ALSO APPROVED THE CONSTRUCTION AND DEVELOPMENT OF INDUSTRIAL PARK BY THE ASSESSEE AND NECESSARY APPROVAL WAS GRANTED TO THE ASSESSEE FOR PROPOSED AREA TO BE BUILT UP OF 61 ,780 SQ . MTRS. THE FINAL PLAN APPROVED FOR THE SAID PROJECT WAS GROUND PLUS 8 FLOORS. FURTHER, THE ASSESSEE ALSO CONSTRUCTED 9 TH FLOOR AND ON WHICH, THERE WERE TWO UNITS. HOWEVER, THE TOTAL AREA OF CONSTRUCTED PORTION WAS 45048 SQ. MTRS. AS AGAINST THE PROPOSED AREA MENTIONED IN THE APPLICATION FILED BEFORE THE REQUISITE AUTHORITY . SINCE THE AREA WAS WITHIN MARGIN, IT MADE A CLAIM FOR DEDUCTION UNDER SECTION 80IA(IV) OF THE ACT FOR THE SAID 9 TH FLOOR UNITS ALSO. HOWEVER, THE ASSESSING OFFICER DENIED TH E SAID DEDUCTION TO THE ASSESSEE SINCE THE 9 TH FLOOR WAS CONSTRUCTED AFTER COMPLETION OF THE PROJECT OF GROUND PLUS 8 FLOORS. THE ASSESSING OFFICER ALSO REFERRED TO AN APPLICATION MOVED BY THE ASSESSEE IN RESPECT OF ANOTHER PROJECT, UNDER WHICH, THE PROPO SED AREA OF ABOUT 51,096 SQ. MTRS. ONLY. HENCE, THE ITA NO. 737 /PN/20 1 4 M/S. WEIKFIELD IT CITI INFO PARK 11 ASSESSING OFFICER RE - COMPUTED THE DEDUCTION UNDER SECTION 80IA(IV) OF THE CT, AGAINST WHICH THE ASSESSEE WAS HELD TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME AND PENALTY UNDER SECTION 271(1)(C) O F THE ACT WAS LEVIED. THE CLAIM OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND EVEN BEFORE US WAS THAT IT HAD CLAIMED THE SAID DEDUCTION UNDER SECTION 80IA(IV) OF THE ACT UNDER THE BONAFIDE BELIEF THAT SINCE TOTAL CONSTRUCTED AREA WAS WITHIN PROPOSED AR EA, WHICH WAS APPROVED IN THE HANDS OF ASSESSEE, IT WAS ENTITLED TO THE SAID CLAIM OF DEDUCTION. MERELY BECAUSE THE SAID DEDUCTION WAS DENIED IN THE HANDS OF ASSESSEE, AGAINST WHICH, IT HAD NOT FILED ANY APPEAL, CANNOT ESTABLISH THAT THE CLAIM OF THE ASSE SSEE WAS NOT BONAFIDE. FURTHER, THE ASSESSEE CLAIMS TO HAVE FURNISHED COMPLETE INFORMATION VIS - - VIS ITS DEDUCTION UNDER SECTION 80IA(IV) OF THE ACT ALONG WITH RETURN OF INCOME IN THE FORM OF AUDIT REPORT PREPARED BY THE AUDITOR IN FORM NO.10CB AND OTHER INFORMATION FILED IN THE RETURN OF INCOME. IN VIEW OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, THE ASSESSEE CLAIMED THAT SINCE IT HAD MADE A BONAFIDE CLAIM, WHI CH WAS THOUGH NOT ALLOWED TO IT, THE EXPLANATION (1) TO SECTION 271(1)(C) OF THE ACT W AS NOT ATT RACTED AND THE ASSESSEE WAS NOT LIABLE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. WE FIND MERIT IN THE CLAIM OF THE ASSESSEE IN THIS REGARD, WHERE COMPLETE INFORMATION WAS FURNISHED BY THE ASSESSEE ALONG WITH RETURN OF INCOME AND EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISHED THE REQUISITE INFORMATION. SINCE THE TOTAL CONSTRUCTED AREA OF INDUSTRIAL PARK WAS WITHIN LIMITS OF PROPOSED AREA OF INDUSTRIAL PARK, THE ASSESSEE BONAFIDELY BELIEVED THAT IT WAS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IA(IV) OF THE ACT AND THE SAME WAS MADE IN THE RETURN OF INCOME. THE SAID CLAIM WAS FURTHER SUPPORTED BY VARIOUS EVIDENCES FILED BY THE ASSESSEE AND ALSO THE CLAIM WAS IN TUNE WITH THE AUDIT REPORT GIVEN BY THE AUDITORS . IN THE ENTIRETY OF THE ABO VE SAID FACTS AND CIRCUMSTANCES AND APPLYING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA), ITA NO. 737 /PN/20 1 4 M/S. WEIKFIELD IT CITI INFO PARK 12 WE HOLD THAT THERE IS NO MERIT IN LEVY OF PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C) OF THE ACT UPON THE ASSESSEE HOLDING THE ASSESSEE TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME . T HE CONDITIONS FOR LEVY OF PENALTY FOR CONCEALMENT HAVING NOT BEEN FULFILLED, DOES NOT WARRANT LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ACCORDINGLY, UPHOLDING THE ORDER OF CIT(A), WE FIND NO MERIT IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 1 3 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 10 TH DAY OF MARCH , 201 6 . SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 10 TH MARCH , 201 6 . GCVSR GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPE LLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - II , PUNE ; 4. / THE CIT - II, PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE