M/s Nicotra India Pvt. Ltd., New Delhi V. ACIT, New Delhi

MA 109/DEL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8844 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 14-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order; Wrong claim; Difference of opinion; Corroborative evidences; Onus to prove; Revised return
• Section: 271(1)(c); 143(3); 142(1); 80IB; 139(5); 143(1); 80IA; 139

Judgement Text

FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 1 OF 34 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: FRIDAY-F NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADEE ANTH MISSHRA, ACCOUNTANT MEMBER M.A. NOS.- 109 & 110/DEL/2017 ARISING OUT OF ITA NO:- 3953 & 3954/DEL/2013, ( ASSESSMENT YEARS: 2005-06 & 2006-07) M/S NICOTRA INDIA PRIVATE LIMITED. SHOP NO. 2F-201, IIND FLOOR, PLOT NO. 1 & 2, LSC BLOCK G, KONDLI, GHAROLI, MAYUR VIHAR, PHASE-II, NEW DELHI- 110032. VS. ACIT, CIRCLE- 13(1), NEW DELHI. PAN NO: AABCN6199B APPELLANT RESPONDENT ASSESSEE BY : MS. VANDANA SHARMA, CA REVENUE BY : MS. ASHIMA NEB, (SR. DR) ORDER PER ANADEE NATH MISSHRA, ACCOUNTANT MEMBER (A) FOR THE SAKE OF CONVENIENCE, THESE TWO MISCELLANEOU S APPLICATIONS (MAS, FOR SHORT) EACH DATED 08.02.2017, FILED BY THE ASSESSEE U/S 254(2) OF INCOME TAX ACT ON 14/02/2017, IN RESPECT OF CONSOLIDATED ORDER DATED 11.08.2016 OF INCOME TAX APPELLATE TRIBUNAL (ITAT, FOR SHORT) IN ITA NOS. 3953 & 395 4/DEL/2013, FOR ASSESSMENT YEARS: 2005-06 & 2006-07; ARE BEING DISPOSED OFF THROUGH T HIS CONSOLIDATED ORDER. AS PER FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 2 OF 34 RECORDS, THESE MAS WERE FILED BY THE ASSESSEE IN RE GISTRY ON 14.02.2017, AND WERE BROUGHT TO OUR NOTICE ON 23.05.2017. RESPECTFULLY FOLLOWING THE RATIO OF ORDER OF HONBLE SUPREME COURT IN THE CASE OF SREE AYYANAR S PINNING AND WEAVING MILLS LTD. V. CIT 301 ITR 434 (SC), IN WHICH THE HONBLE SUPREME COURT APPROVED HARSHVARDHAN CHEMICALS AND MINERALS LTD. V. UNION OF INDIA [2002 ] 256 ITR 767 (RAJ.) AND REVERSED DECISION OF THE MADRAS HIGH COURT IN CIT V. SREE AY YANAR SPINNING AND WEAVING MILLS LTD. [2008] 296 ITR 53 (MADRAS); THESE MAS ARE BEIN G DISPOSED OFF ON MERITS AND NOT BEING REJECTED ON THE GROUND OF LIMITATION. (B) RELEVANT PORTION OF THE AFORESAID CONSOLIDATED ORD ER DATED 11.08.2016 OF ITAT IN ITA NOS. 3953 & 3954/DEL/2013, FOR ASSESSMENT YEARS : 2005-06 & 2006-07; WHICH IS SOUGHT TO BE AMENDED THROUGH THESE MAS; IS REPRODUC ED AS UNDER, FOR THE EASE OF READY REFERENCE: 2. FOR THE SAKE OF CONVENIENCE, THESE TWO APPEALS FILED BY THE ASSESSEE ARE DISPOSED OFF THROUGH THIS CONSOLIDATED ORDER. THESE APPEALS ARE FILED AGAINST LEVY OF PENALTIES AMOUNTING TO RS.10,35,008/- FOR A SSTT. YEAR 2005-06 AND RS. 15,20,262/- FOR ASSTT. YEAR 2006-07 LEVIED U/S 271( 1)(C) OF I.T. ACT. THE PENALTIES WERE IMPOSED BY THE LD. AO IN RESPECT OF CLAIM MADE BY THE ASSESSEE U/S 80IB OF I.T. ACT IN THE ORIGINAL RETUR N OF INCOME FOR ASSTT. YEARS 2005-06 AND 2006-07 RESPECTIVELY. THE QUANTUM OF DE DUCTION CLAIMED U/S 80IB OF I.T. ACT WAS RS.28,28,472/- FOR ASSTT. YEAR 2005 -06 AND RS.45,16,523/- FOR ASSTT. YEAR 2006-07. IN THE COURSE OF ASSTT. PROCE EDINGS FOR ASSTT. YEAR 2005- 06 THE LD. AO ISSUED QUESTIONNAIRE DATED 4.7.2007 W HEREIN, VIDE POINT NO. 6 OF THE QUESTIONNAIRE, THE ASSESSEE WAS ASKED BY THE LD . AO TO GIVE DETAILS OF EXEMPTIONS AND DEDUCTIONS CLAIMED BY IT AND TO CLAR IFY AS TO WHY THE SAME SHOULD BE ACCEPTED BY THE DEPARTMENT. THEREAFTER, T HE ASSESSEE FILED REVISED RETURN U/S 139(5) OF INCOME TAX ACT ON 31.10.2007 F OR ASSTT. YEAR 2005-06 WITHDRAWING THE DEDUCTION CLAIMED U/S 80IB OF IT AC T AMOUNTING TO RS. 28,28,472/-. HOWEVER THE LD. AO TREATED THE REVISED RETURN AS NOT FILED SINCE THE REVISED RETURN WAS SUBMITTED BEYOND THE STATUTO RY TIME LIMIT PRESCRIBED U/S 139(5) OF I.T. ACT. IN THE ASSESSMENT CONCLUDED , THE DEDUCTION CLAIMED U/S FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 3 OF 34 80IA OF I.T. ACT IN THE ORIGINAL RETURN, AMOUNTING TO RS. 28,28,472/- WAS DISALLOWED. SIMULTANEOUSLY PENALTY PROCEEDINGS U/S 271(1)(C) OF INCOME TAX ACT WERE ALSO INITIATED FOR ASSTT. YEAR 2005-06 BY THE LD. AO. FOR ASSTT. YEAR 2006-07 ALSO, THE ASSESSEE REVISED THE ORIGINAL RET URN AND FILED THE REVISED RETURN U/S 139(5) OF I.T. ACT ON 31.10.2007 WITHDR AWING THE DEDUCTION CLAIMED U/S 80IB AMOUNTING TO RS. 45,16,523/-. THOUGH THE R EVISED RETURN WAS FILED FOR ASSTT. YEAR 2006-07 WITHIN THE TIME LIMIT FOR ASSTT . YEAR 2006-07 PERMISSIBLE U/S 139 (5) TO I.T. ACT, THE LD. AO HELD THAT THE REVIS ED RETURN WAS NOT FILED SUO MOTO BUT WAS FILED ON THE INSTANCE OF DEPARTMENT I. E. WHEN THE ISSUE RELATING TO ALLOWABILITY OF DEDUCTION U/S 80IA OF ACT WAS CO NFRONTED WITH THE ASSESEE IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSTT. YEA R 2005-06 VIDE QUESTIONNAIRE DATED 4.7.2007 AND IN VIEW OF THAT, T HE LD. AO HELD THAT THE REVISION OF RETURN FOR ASSTT. YEAR 2006-07 WILL NOT ABSOLVE THE ASSESSEE OF THE PURVIEW OF PENALTY PROCEEDINGS UNDER THE PROVISIONS OF SECTION 271(1)(C) OF INCOME TAX ACT. PENALTY PROCEEDINGS WERE INITIATED BY LD. AO FOR ASSTT. YEAR 2006-07 ALSO U/S 271(1)(C) OF I.T. ACT. 2.1. DURING PENALTY PROCEEDINGS U/S 271(1)(C) FOR AS STT. YEAR FOR ASSTT. YEAR 2005-06 THE ASSESSEE NEITHER APPEARED BEFORE THE LD . AO NOR FILED ANY REPLY TO THE SHOW CAUSE NOTICE ISSUED BY LD. AO TO THE ASSE SSEE COMPANY. THE AO LEVIED PENALTY AMOUNTING TO RS. 10,35,008/- U/S 271 (1)(C) OF I.T. ACT WITH THE FOLLOWING OBSERVATIONS :- 4.1 FROM THE ABOVE DISCUSSIONS IT IS CLEAR THAT TH E ASSESSEE COMPANY WAS ITSELF AWARE THAT IT DID NOT FULFILLING THE CONDITI ONS SPECIFIED IN SECTION 8018 OF THE I.TAX ACT AND FILING THE REVISED RETURN WAS ALS O NOT CORRECT. FURTHER IN THE EVENT OF PENALTY PROCEEDINGS, IT DID NOT OFFER ANY EXPLANATION, REGARDING DISALLOWANCES OF DEDUCTION U/S 8018 AND IMPOSITION OF PENALTY. THE CASE OF THE ASSESSEE, THEREFORE, SQUARELY FALLS UNDER EXPLANATI ON 1 & 4 TO SECTION 271(1)(C) OF INCOME TAX ACT, 1961. REFERENCE CAN ALSO BE MADE TO THE CASE LAW OF CIT VS. ESCORTS FINANCE LTD. (2009) 226 CTR 105 (DEL), WHERE THE JURISDICTIONAL HIGH COURT HELD THAT IN CASE OF FALSE CLAIM PENALTY FOR CONCEALMENT IS LEVIABLE EVEN THOUGH THE SAID CLAIM IS DECLARED IN THE RETUR N OF INCOME. THE ABOVE DECISION WAS RENDERED IN VIEW OF THE FACT THAT EACH YEAR, THE REVENUE HARDLY TAKES UP THREE TO FIVE PERCENT OF RETURNS UNDER SCR UTINY U/S 143(2) OF THE ACT AFTER WHICH ASSESSMENT IS FRAMED UNDER SUB-SECTION (3) OF SECTION 143 OF THE ACT. THEREFORE, WITH THE HOPE THAT ITS RETURN MAY N OT COME UNDER SCRUTINY AND MAY BE ASSESSED ON THE BASIS OF 'SELF ASSESSMENT.', AS ASSESSEE CAN VENTURE TO GIVE WRONG INFORMATION. THEREFORE, IT WAS HELD THAT MERELY BECAUSE INFORMATION WAS AVAILABLE IN THE TAX AUDIT REPORT, WOULD NOT AB SOLVE IT FROM THE PENALTY. IN ANOTHER CASE GUJARAT HIGH COURT IN THE CASE OF CIT VS. VIDYAGAURI NATWARLAL AND ORS. (1999) 238 ITR (GUJ) HAD HELD THAT IN THE CASE OF FALSE CLAIM, PENALTY FOR CONCEALMENT IS ATTRACTED. 4.2 AFTER CONSIDERING THE APEX COURT DECISION IN TH E CASE OF M/S RELIANCE PETROPRODUCTS, THE HON'BLE HIGH COURT OF DELHI IN T HE CASE OF M/S ZOOM COMMUNICATION PVT. LTD., IN ITA NO.7/201 0 DATED 24 .05.2010 HAS HELD THAT- FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 4 OF 34 'THE COURT CANNOT OVERLOOK THE FACT THAT ONLY A SMA LL PERCENTAGE OF THE INCOME TAX RETURNS ARE PICKED UP FOR SCRUTINY. IF THE ASSE SSEE MAKES A CLAIM WHICH IS NOT ONLY INCORRECT IN LAWS BUT IS ALSO WHOLLY WITHO UT ANY BASIS AND THE EXPLANATION FURNISHED BY HIM FOR MAKING SUCH A CLAI M IS NOT FOUND TO BE BONAFIDE, IT WOULD BE DIFFICULT TO SAY THAT HE WOUL D STILL NOT BE LIABLE TO PENALTY U/S 271 (1)(C) OF THE ACT. THE HON'BLE HIGH COURT O BSERVED THAT THE A CLAIM WHICH IS WHOLLY UNTENABLE IN LAW AND HAS ABSOLUTELY NO FOUNDATION ON WHICH IT COULD BE MEAN, THE ASSESSEE WOULD NOT BE LIABLE TO IMPOSITION OF PENALTY, EVEN IF HE WAS NOT ACTING BONAFIDE WHILE MAKING A CLAIM OF THIS NATURE, THAT WOULD GIVE A LICENCE TO UNSCRUPULOUS ASSESSEES TO MAKE WH OLLY UNTENABLE AND UNSUSTAINABLE CLAIMS WITHOUT THERE BEING ANY BASIS FOR MAKING THEM, IN THE HOPE THAT THEIR RETURN WOULD NOT BE PICKED UP FOR S CRUTINY AND THEY WOULD BE ASSESSED ON THE BASIS OF SELF ASSESSMENT UNDER SECT ION 143(1) OF THE ACT AND EVEN IF THEIR CASE IS SELECTED FOR SCRUTINY, THEY C AN GET AWAY MERELY BY PAYING THE TAX, WHICH IN ANY CASE, WAS PAYABLE BY THE. THE CONSEQUENCE WOULD BE THAT THE PERSONS WHO MAKE CLAIMS OF THIS NATURE, AC TUATED BY A MALAFIDE INTENTION TO EVADE TAX OTHERWISE PAYABLE BY SCRUTIN Y. THIS WOULD TAKE AWAY THE DETERRENT EFFECT, WHICH THESE PENALTY PROVISIONS IN THE ACT HAVE'. 2.1.1. THE ASSESSEE FILED APPEAL BEFORE LD. CIT(A) AGA INST LEVY OF PENALTY U/S 271(1)(C) OF I.T. ACT AMOUNTING TO RS. 10,35,00 8/- FOR ASSTT. YEAR 2005-06. THE ASSESSEE SUBMITTED BEFORE LD. CIT(A) THAT AT TH E TIME OF PREPARING THE INCOME TAX RETURN FOR ASSTT. YEAR 2007-08 IT CAME I N THE KNOWLEDGE OF THE ASSESSEE COMPANY THAT SUCH DEDUCTION WAS NOT AVAILA BLE TO THE ASSESSEE. THE ASSESSEE CLAIMED BEFORE THE LD. CIT(A) THAT WITHDRA WAL OF CLAIM U/S 80IB OF I.T. ACT WAS A CONSCIOUS DISCLOSURE FROM THE ASSESS EE COMPANY ITSELF. HOWEVER THE ASSESSEE COMPANY FAILED TO PROVIDE ANY EXPLANAT ION OR INFORMATION / PARTICULARS ABOUT ELIGIBILITY CRITERIA ON THE BASIS OF WHICH DEDUCTION U/S 80IB OF IT ACT WAS CLAIMED AND HOW OR ON WHAT BASIS IT WAS REALISED (AT THE TIME OF FILING OF RETURN FOR ASSTT. YEAR 2007-08) THAT SUCH DEDUCTION WAS NOT AVAILABLE. LD. CIT(A) HELD IN HIS ORDER DATED 19.3.2013 THAT T HE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME ON ACCOUNT OF INEL IGIBLE DEDUCTION CLAIMED U/S 80IB OF I.T. ACT AND CONFIRMED THE LEVY OF PENALTY U/S 271(1)(C) OF I.T. ACT BY RELYING ON THE FOLLOWING DECISIONS : 1. K.P. MADHUSUDHANAN V. CIT (2001) 118 TAXMAN 324 (SC ) 2. RAVI & CO. V. ACIT (2005) 143 TAXMAN 287 (MAD.) 3. M. SAJJANRAJ NAHAR V. CIT (2006) 155 TAXMAN 536 (MA D.) 4. CIT, DELHI-IV V. ESCORTS FINANCE LTD. *(2009) 183 T AXMAN 453 (DELHI) 5. CIT V. ZOOM COMMUNICATION (P.) LTD. (2010) 191 TAXM AN 179 (DELHI) 2.1.2. DURING PENALTY PROCEEDINGS FOR ASSTT. YEAR 2006-07 THE AO ISSUED SHOW CAUSE NOTICE TO ASSESSEE ON 11.1.2012.THE ASSESSEE FILED ITS REPLY AND SUBMITTED THAT ALL THE DETAILS GIVEN IN THE RETURN WERE CORRECT, THERE WAS NO CONCEALMENT OF INCOME, NOR THERE WERE ANY INACCURAT E PARTICULARS OF SUCH INCOME FURNISHED.THE ASSESSEE COMPANY ALSO SUBMITTE D THAT IT CLAIMED DEDUCTION U/S 80IB AS IT WAS OF OPINION THAT IT IS AVAILABLE TO THEM, BUT WHILE FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 5 OF 34 PREPARING RETURN FOR ASSTT. YEAR 2007-08, IT CAME T O THE KNOWLEDGE OF THE MANAGEMENT THAT THIS DEDUCTION WAS NOT AVAILABLE TO THE ASSESSEE COMPANY, AND THE COMPANY IMMEDIATELY REVISED THE RETURN OF I NCOME FOR ALL THE EARLIER YEARS THEREBY PAYING TAX DUE ALONGWITH INTEREST. I T WAS ALSO SUBMITTED BY ASSESSEE BEFORE LD. AO THAT THE QUESTIONNAIRE ISSUE D FOR A.Y. 2005-06 WAS GENERAL IN NATURE AND THERE WAS NO SHOW CAUSE TO WI THDRAW THE DEDUCTION U/S 80IB OF THE I.T. ACT. IT WAS FURTHER SUBMITTED BY ASSESSEE BEFORE LD. AO THAT THE WITHDRAWAL OF CLAIM BY ASSESSEE WAS WELL BEFOR E PASSING ANY ORDER U/S 143(3) IN THE ASSESSMENT PROCEEDINGS AND THAT SUCH WITHDRAWAL DID NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF I NCOME IN ITS ORIGINAL RETURN OF INCOME FILED ON 1.11.2006. HOWEVER, THE LD. AO REJE CTED THE SUBMISSIONS MADE BY THE ASSESEE, AND LEVIED PENALTY AMOUNTING T O RS. 15,20,262/- U/S 271(1)(C) OF I.T. ACT. THE ASSESSEE FILED APPEAL AG AINST LEVY OF PENALTY U/S 271(1)(C) BEFORE THE LD. CIT(A). BEFORE THE LD. CIT (A) THE ASSESSEE SUBMITTED THAT NO SHOW CAUSE WAS ISSUED TO THE ASSESSEE TO DI SALLOW THE DEDUCTION CLAIMED U/S 80IB OF THE IT ACT ; THAT THE ASSESSEE COMPANY CLAIMED DEDUCTION U/S 80IB AS IT WAS OF THE VIEW THAT SUCH DEDUCTION IS AVAILABLE TO THEM BUT WHILE PREPARING RETURN FOR AY 2007-08, IT CAME TO T HE KNOWLEDGE OF THE MANAGEMENT THAT THIS DEDUCTION IS NOT AVAILABLE TO THE ASSESSEE COMPANY, AND THE ASSESSEE COMPANY IMMEDIATELY REVISED THE RETURN S OF INCOME FOR ALL THE EARLIER YEARS THEREBY PAYING TAX DUE ALONG WITH INT EREST. THE ASSESSEE SUBMITTED BEFORE LD. CIT(A) THAT IT WAS A CONSCIOUS DISCLOSURE FROM THE ASSESSEE COMPANY ITSELF AND THAT SUCH WITHDRAWAL D ID NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME IN I TS ORIGINAL RETURN OF INCOME FILED ON 01.11.2006. THE ASSESEE SUBMITTED BEFORE T HE LD. CIT(A) THAT WITHDRAWAL OF CLAIM MADE BY THE ASSESSEE COMPANY WA S SOLELY ON ACCOUNT OF DIFFERENT VIEWS TAKEN ON THE SAME SET OF FACTS AND THEREFORE, THEY COULD, AT THE MOST, BE TERMED AS DIFFERENCE OF OPINION BUT NOTHIN G TO DO WITH THE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF SUCH INCOME. THE LD. CIT(A), VIDE SEPARATE ORDER DATED 19.3.2013 FOR ASSTT. YEAR 2006-07, UPHELD THE LEVY OF PENALTY U/S 271(1)(C) AND DISMIS SED ASSESSEES APPEAL RELYING ON THE FOLLOWING DECISIONS :- 1. K.P. MADHUSUDHANAN V. CIT (2001) 118 TAXMAN 324 (SC ) 2. RAVI & CO. V. ACIT (2005) 143 TAXMAN 287 (MAD.) 3. M. SAJJANRAJ NAHAR V. CIT (2006) 155 TAXMAN 536 (MA D.) 4. CIT, DELHI-IV V. ESCORTS FINANCE LTD. *(2009) 183 T AXMAN 453 (DELHI) 5. CIT V. ZOOM COMMUNICATION (P.) LTD. (2010) 191 TAXM AN 179 (DELHI) 3. NOW THE ASSESSEE IS IN APPEAL BEFORE US FOR BOTH ASSTT. YEAR 2005-06 AND 2006-07. WE HAVE HEARD BOTH SIDES CAREFULLY. WE HA VE ALSO PERUSED THE MATERIALS ON RECORD. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE VEHEMENTLY OPPOSED THE ORDERS OF THE LOWER AUTHORIT IES FOR BOTH ASSTT. YEARS 2005-06 AND 2006-07. SHE RELIED ON SUPREME COURT DE CISION IN THE CASE OF VIRTUAL SOFT SYSTEMS LTD. VS. CIT(2007) 159 TAXMAN 155 (SC) FOR THE PROPOSITION THAT SECTION 271 OF INCOME TAX ACT HAS TO BE CONSTRUED STRICTLY AND NARROWLY AND NOT WIDELY OR WITH THE OBJECT OF ADVAN CING THE OBJECT AND FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 6 OF 34 INTENTION OF THE LEGISLATURE. SHE ALSO CONTENDED TH AT THE VIEW FAVOURABLE TO THE ASSESSEE SHOULD BE ADOPTED WHEN TWO REASONABLE VIEW S ARE POSSIBLE. SHE FURTHER RELIED ON THE DECISION OF HONBLE SUPREME C OURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. 322 ITR 158 (SC) FOR T HE PROPOSITION THAT MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, DOES NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SHE CONTENDED THAT WITHDRAWAL OF THE CLAIM U/S 80IB OF I.T. ACT WAS A VOLUNTARY AND BONAFIDE ACT ON REALISING THAT THIS DEDUCTION W AS NOT AVAILABLE TO THE ASSESSEE. SHE ALSO CONTENDED THAT THIS REALISATION CAME TO THE ASSESSEE AT THE TIME OF FILING RETURN FOR ASSTT. YEAR 2007-08. SHE FURTHER HIGHLIGHTED THE FACT THAT NO SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSE E EITHER TO WITHDRAW OR TO DISALLOW THE DEDUCTION CLAIMED U/S 80IB OF I.T. ACT FOR EITHER ASSTT. YEAR 2005- 06 OR ASSTT. YEAR 2006-07. ON THE OTHER HAND THE LD . DR STRONGLY SUPPORTED THE ORDERS OF THE LD. AO AND THE LD. CIT(A). 3.1. WE FIND THAT THE WITHDRAWAL OF CLAIM U/S 80IB O F I.T. ACT WAS MADE BY THE ASSESSEE ONLY AFTER THE QUESTIONNAIRE WAS ISSUE D TO THE ASSESSEE FOR ASSTT. YEAR 2005-06 BY THE AO, IN THE COURSE OF ASSTT. PRO CEEDINGS FOR ASSTT. YEAR 2005-06 ASKING THE ASSESSEE TO FURNISH THE DETAILS OF ALL EXEMPTIONS AND DEDUCTIONS CLAIMED BY IT IN THE RETURN OF INCOME AN D TO CLARIFY AS TO WHY THE DEDUCTION / EXEMPTION CLAIMED BY IT SHOULD BE ACCEP TED BY THE DEPARTMENT. FURTHER WE HAVE ALSO NOTICED THAT AT NO STAGE, EITH ER BEFORE THE LOWER AUTHORITIES OR BEFORE US THE ASSESSEE OFFERED ANY E XPLANATION OR INFORMATION / PARTICULARS ABOUT THE ELIGIBILITY CRITERIA ON THE B ASIS OF WHICH THE DEDUCTION WAS CLAIMED IN THE ORIGINAL RETURN FILED BY THE ASSESSE E. SIMILARLY THOUGH THE ASSESEE CLAIMED THAT IT CAME TO THE KNOWLEDGE OF AS SESSEE AT THE TIME OF FILING RETURN FOR ASSTT YEAR 2007-08 THAT DEDUCTION U/S 80 IB WAS NOT AVAILABLE TO THE ASSESSEE ; THE ASSESSEE HAS ALSO NOT PROVIDED ANY E XPLANATION OR INFORMATION / PARTICULARS AS TO ON WHAT BASIS IT REALISED AT THE TIME OF FILING INCOME TAX RETURN FOR ASSTT. YEAR 2007-08 THAT DEDUCTION U/S 80IB OF I.T. ACT WAS NOT AVAILABLE TO THE ASSESSEE. THE ASSESEE SUBMITTED THAT CLAIM WAS EARLIER MADE AND LATER WITHDRAWN ON ACCOUNT OF DIFFERENCE OF OPINION. HOWE VER, AT NO STAGE HAS THE ASSESSEE PROVIDED ANY EXPLANATION OR INFORMATION/ P ARTICULARS ABOUT WHAT WAS THE DIFFERENCE OF OPINION. IN THESE FACTS AND CIRCU MSTANCES WE HOLD THAT THE ASSESEE HAS NOT BEEN ABLE TO SUBSTANTIATE THE EXPLA NATION FURNISHED BY IT ; AND HAS FAILED TO PROVE THAT THE EXPLANATION IS BONAFID E. IN THESE FACTS AND CIRCUMSTANCES WE ALSO HOLD THAT FACTS RELATING TO T HE EXPLANATION FURNISHED BY THE ASSESSEE AND MATERIAL TO THE COMPUTATION OF ASS ESSEES TOTAL INCOME HAVE NOT BEEN DISCLOSED BY THE ASSESSEE. THUS, THE ASSES EE IS CLEARLY HIT BY EXPLANATION 1(B) OF S. 271(1)(C) OF I.T. ACT, EVEN ON STRICT AND NARROW CONSTRUCTION OF S. 271(1)(C) OF I.T. ACT AND TWO RE ASONABLE VIEWS ARE NOT POSSIBLE. HENCE THE CASE OF VIRTUAL SOFT SYSTEM LTD . VS. CIT (SUPRA) DOES NOT HELP THE ASSESSEE. THE ASSESSEE WITHDREW DEDUCTION U/S 80IB OF I.T. ACT BY FILING REVISED RETURN ONLY WHEN IT WAS FACED WITH Q UERY RAISED BY REVENUE DURING ASSESSMENT PROCEEDINGS FOR ASSTT. YEAR 2005- 06, TO JUSTIFY ITS CLAIM U/S 80IB OF I.T. ACT. THE ASSESSEE COULD HAVE WITHDRAWN THE CLAIM BEFORE THE CASE WAS SELECTED FOR SCRUTINY BY ISSUE OF NOTICE U/S 14 3(2) OF I.T. ACT, WHICH THE FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 7 OF 34 ASSESSEE FAILED TO DO. IN FACT THE ASSESSEE DID NOT WITHDRAW THE CLAIM EVEN AFTER THE CASE WAS SELECTED FOR SCRUTINY BY ISSUE O F NOTICE U/S 143(2) OF I.T. ACT ; AND WAITED TILL THE AO ISSUED THE QUESTIONNAIRE S PECIFICALLY REQUIRING THE ASSESSEE TO JUSTIFY ITS CLAIM. UNDER THESE FACTS AN D CIRCUMSTANCES IT REASONABLY CAN ALSO BE CONCLUDED THAT THE ASSESSEE ALREADY KN EW AT THE TIME OF FILING ORIGINAL RETURNS OF INCOME FOR ASSTT. YEAR 2005-06 AND FOR ASSTT. YEAR 2006-07 THAT THE DEDUCTION U/S 80IB OF I.T. ACT WAS NOT AVA ILABLE TO IT AND FURTHER THAT DESPITE THIS KNOWLEDGE, THE ASSESSEE MADE CLAIM U/ S 80IB OF I.T. ACT, THOUGH IT WAS NOT ADMISSIBLE, WITH THE MOTIVE TO AVAIL OF DEDUCTION U/S 80IB OF I.T. ACT IN CASE THE RETURNS FOR ASSTT. YEAR 2005-06 AND 200 6-07 WERE NOT SELECTED FOR SCRUTINY. 3.2. THE LD. AR OF THE ASSEESSEE DREW OUR ATTENTION TO APEX COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. 189 TAXMAN 322 (SC) AND CONTENDED THAT MERELY BECAUSE CLAIM U/S 80IB OF I.T . ACT WAS NOT ACCEPTABLE TO REVENUE, THAT BY ITSELF WOULD NOT ATTRACT PENALT Y U/S 271(1)(C) OF I.T. ACT. HOWEVER, FACTS OF THIS CASE ARE QUITE DISTINGUISHAB LE FROM FACTS OF THE RELIANCE PETROPRODUCTS (P) LTD. (SUPRA). IN THAT CASE, NO IN FORMATION GIVEN IN THE RETURNS WAS FOUND TO BE INCORRECT OR INACCURATE. IN THE CAS ES BEFORE US, HOWEVER, THE CLAIM MADE BY ASSESSEE U/S 80IB OF I.T. ACT IN ORIG INAL RETURNS OF INCOME FOR ASSTT. YEAR 2005-06 AND 2006-07 WERE INCORRECT BY A SSESSEES OWN ADMISSION. IN FACT, THE CASE OF THE ASSESSEE IS DIRECTLY COVER ED AGAINST THE ASSESSEE BY DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. ZOOM COMMUNICATION PVT. LTD. 191 TAXMAN 179 (DELHI). IN CIT VS. ZOOM COMMUNICATION PVT. LTD. (SUPRA) , WHICH IS BINDING ON US ; THE HONBLE JURISDICTIONAL HIGH COURT HELD, AFTER CONSIDERING C IT VS. RELIANCE PETROPRODUCTS (SUPRA) AS UNDER :- IT IS TRUE THAT MERE SUBMITTING A CLAIM WHICH IS I NCORRECT, IN LAW, WOULD NOT AMOUNT TO GIVING INACCURATE PARTICULARS OF THE INCO ME OF THE ASSESSEE, BUT IT CANNOT BE DISPUTED THAT THE CLAIM MADE BY THE ASSES SEE NEEDS TO BE BONA FIDE. IF THE CLAIM BESIDES BEING INCORRECT, IN LAW, IS MA LA FIDE THE EXPLANATION 1 TO SECTION 271 (1) WOULD COME INTO PLAY AND WORK TO TH E DISADVANTAGE OF THE ASSESSEE. [PARA 19] THE COURT CANNOT OVERLOOK THE FACT THAT ONLY A SMAL L PERCENTAGE OF THE INCOME- TAX RETURNS ARE PICKED UP FOR SCRUTINY. IF THE ASSE SSEE MAKES A CLAIM WHICH IS NOT ONLY INCORRECT IN LAW, BUT IS ALSO WHOLLY WITHO UT ANY BASIS AND THE EXPLANATION FURNISHED BY HIM FOR MAKING SUCH A CLAI M IS NOT FOUND TO BE BONA FIDE, IT WOULD BE DIFFICULT TO SAY THAT HE WOULD ST ILL NOT BE LIABLE TO PENALTY UNDER SECTION 271 (1)( C ). IF ONE TAKES THE VIEW THAT A CLAIM WHICH IS WHOLLY UNTENABLE IN LAW AND HAS ABSOLUTELY NO FOUNDATION O N WHICH IT COULD BE MADE, THE ASSESSEE WOULD NOT BE LIABLE TO IMPOSITION OF P ENALTY, EVEN IF HE WAS NOT ACTING BONA FIDE WHILE MAKING A CLAIM OF THIS NATUR E, THAT WOULD GIVE A LICENCE TO THE UNSCRUPULOUS ASSESSEES TO MAKE WHOLLY UNTENA BLE AND UNSUSTAINABLE CLAIMS WITHOUT THERE BEING ANY BASIS FOR MAKING THE M, IN THE HOPE THAT THEIR RETURN WOULD NOT BE PICKED UP FOR SCRUTINY AND THEY WOULD BE ASSESSED ON THE BASIS OF SELF-ASSESSMENT UNDER SECTION 143(1) AND E VEN IF THEIR CASE IS SELECTED FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 8 OF 34 FOR SCRUTINY, THEY CAN GET AWAY MERELY BY PAYING TH E 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 MALA FIDE INTE NTION TO EVADE TAX OTHERWISE PAYABLE BY THEM, WOULD GET AWAY WITHOUT PAYING THE TAX LEGALLY PAYABLE BY THEM, IF THEIR CASES ARE NOT PICKED UP FOR SCRUTINY . THIS WOULD TAKE AWAY THE DETERRENT EFFECT, WHICH THESE PENALTY PROVISIONS IN THE ACT HAVE. (PARA20) 3.2.1. FURTHER, PERUSAL OF THE BINDING ORDER OF HONBLE J URISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ZOOM COMMUNICATION PVT . LTD. (SUPRA), RELEVANT PORTION OF WHICH HAS BEEN REPRODUCED IN THE PRECEDI NG PARAGRAPH 3.2, SHOWS THAT THE HONBLE HIGH COURT HAS TAKEN JUDICIAL NOTI CE OF THE FACT THAT ONLY A SMALL PERCENTAGE OF INCOME-TAX RETURNS ARE PICKED U P FOR SCRUTINY AND HAS HELD THAT PROVISIONS FOR LEVY OF PENALTY U/S 271(1)(C) O F I.T. ACT ARE MEANT TO HAVE DETERRENT EFFECT AGAINST THOSE PERSONS WHO MAKE CL AIMS, ACTUATED BY A MALAFIDE INTENTION TO EVADE TAX OTHERWISE PAYABLE B Y THEM LEGALLY, IF THEIR CASES ARE NOT PICKED UP FOR SCRUTINY. VIEWED IN THI S BACKGROUND, WE ARE OF THE VIEW THAT FILING OF REVISED RETURN FOR ASSTT. YEAR 2005-06 AND 2006-07 BY THE ASSESEE WITHDRAWING THE CLAIM U/S 80IB OF I.T. ACT ; WELL AFTER THE CASE WAS SELECTED FOR SCRUTINY FOR ASSTT. YEAR 2005-06 AND A FTER THE ASSESSEE WAS ISSUED QUESTIONNAIRE BY THE LD. ASSESSING OFFICER REQUIRIN G THE ASSESSEE TO CLARIFY AS TO WHY THE SAME SHOULD BE ACCEPTED ; WAS DONE AT TO O LATE A STAGE. THERE IS A CRITICAL STAGE AFTER WHICH IT IS TOO LATE, AND WIT HDRAWAL OF CLAIMS MADE BY THE ASSESSEE CAN NOT SAVE THE ASSESSEE FROM PENAL PROVI SIONS U/S 271(1)(C) OF I.T. ACT. ONE CAN APPRECIATE THE MATTER WITH THE HELP OF ILLUSTRATIVE EXAMPLE OF A TICKETLESS TRAVELLER WHO IS CONFRONTED BY THE TICKE T COLLECTOR WHEN HE IS LEAVING THE DESTINATION STATION, AND IS ASKED TO SHOW TICKE T. THIS ILLUSTRATIVE EXAMPLE IS FOR ANALOGY ONLY AND FOR NO OTHER PURPOSE. THE TICK ET COLLECTOR AT THE EXIT GATE OF A RAILWAY STATION MAY ASK ONLY A SMALL PERCENTAG E OF TRAVELLERS TO SHOW TICKET (JUST AS INCOME TAX DEPARTMENT PICKS UP A SMALL PER CENTAGE OF INCOME-TAX RETURNS FOR SCRUTINY) AND LARGE NUMBERS IN THE CROW D OF TRAVELLERS LEAVING THE STATION MAY NOT BE ASKED BY THE TICKET COLLECTOR TO SHOW THE TICKET. BUT ONCE A TICKETLESS PASSENGER IS CONFRONTED BY THE TICKET CO LLECTOR AND ASKED TO SHOW TICKET, (JUST AS IN THE CASES BEFORE US, THE LD. AO VIDE QUESTIONNAIRE DATED 04.7.2007 ASKED THE ASSESSEE TO CLARIFY WHY EXEMPTI ONS AND DEDUCTIONS CLAIMED BY IT SHOULD BE ACCEPTED) THE TICKETLESS PA SSENGER CANNOT GET AWAY MERELY BY PAYING THE NORMAL FARE. HE HAS TO ALSO PAY PENALTY IN ADDITION TO THE NORMAL FARE UNLESS HE CAN SHOW THAT HE HAD A LE GITIMATE BASIS TO BEGIN THE JOURNEY WITHOUT A VALID TICKET. IN THE CASES BEFORE US, THE ASSESSEE HAS NOT FURNISHED ANY SATISFACTORY EXPLANATION REGARDING WH AT LEGITIMATE BASIS IT HAD TO CLAIM DEDUCTION U/S 80IB OF I.T. ACT AT THE TIME OF FILING OF ORIGINAL RETURNS OF INCOME FOR ASSTT. YEAR 2005-06 AND ASSTT. YEAR 200 6-07. ALSO, THE ASSESSEE DID NOT WITHDRAW THE CLAIMS U/S 80IB OF I.T. ACT FOR AS STT. YEAR 2005-06 AND ASSTT. YEAR 2006-07 IMMEDIATELY AFTER THE CASE WAS SELECTE D FOR SCRUTINY FOR ASSTT. YEAR 2005-06. CLAIMS U/S 80IB OF I.T. ACT WERE WITH DRAWN BY THE ASSESSEE MUCH AFTER THE LD. AO ISSUED QUESTIONNAIRE DATED 4. 7.2007 ASKING THE ASSESSEE TO CLARIFY WHY EXEMPTIONS AND DEDUCTIONS C LAIMED BY IT SHOULD BE FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 9 OF 34 ACCEPTED. BY THAT TIME IT IS TOO LATE AND THE ASSES SEE HAS MISSED THE BOAT. AT THAT LATE A STAGE, WELL PAST THE CRITICAL STAGE, TH E ASSESEE CANNOT GET AWAY BY MERELY PAYING TAXES AND THE ASSESSEE MUST, IN ADDIT ION, ALSO PAY PENALTY U/S 271(1)(C) OF I.T. ACT. 3.2.2. THE ASSESSEE HAS CLAIMED THAT REVISED RETURNS FOR BOTH ASSTT. YEARS 2005-06 AND 2006-07 WERE FILED, WITHDRAWING CLAIM U /S 80IB OF I.T. ACT AT THE TIME WHEN RETURN FOR ASSTT. YEAR 2007-08 WAS BEING FILED. THE ASSESSEE CLAIMS THAT THE REALISATION THAT THE ASSESSEE WAS NOT ELIG IBLE FOR DEDUCTION U/S 80IB OF I.T. ACT WAS ARRIVED AT THE TIME OF FILING RETURN F OR ASSTT. YEAR 2007-08 IMPLIEDLY CLAIMING THEREBY THAT THE ASSESSEE DECIDED TO WITHD RAW THE CLAIMS U/S 80IB OF I.T. ACT FOR ASSTT. YEAR 2005-06 AND ASSTT. YEAR 20 06-07 (BY FILING REVISED RETURNS OF INCOME) NOT BECAUSE OF THE QUESTIONNAIRE DATED 4.7.2007 ISSUED BY THE LD. AO) BUT BECAUSE SUBSEQUENTLY AT THE TIME OF FILING RETURN FOR ASSTT. YEAR 2007-08 THE ASSESSEE ON ITS OWN REALISED THAT DEDU CTION U/S 80IB WAS NOT ADMISSIBLE. THIS IS A SELF-SERVING CLAIM WITHOUT AN Y CREDIBLE PROOF. SELF-SERVING CLAIMS WITHOUT CREDIBLE PROOF DO NOT MERIT SERIOUS CONSIDERATION, AND IN THE FACTS AND CIRCUMSTANCES OF THE CASES BEFORE US, IT DOES NOT ADVANCE THE CAUSE OF THE ASSESSEE. HAD THE REVISED RETURNS BEEN FILED (WITHDRAWING CLAIM MADE U/S 80IB OF I.T. ACT FOR ASSTT. YEAR 2005-06 AND 20 06-07) WELL BEFORE THE TIME OF FILING RETURN FOR ASSTT. YEAR 2007-08 I.E. WELL BEFORE 31.10.2007, BUT AFTER QUESTIONNAIRE DATED 4.7.2007 WAS ISSUED BY LD. AO, WOULD THE ASSESSEE BE JUSTIFIED IN CLAIMING A FAVOURABLE CONSIDERATION ? NO. IN VIEW OF THE REASONING EARLIER GIVEN IN THIS ORDER, THE ASSESSEE WOULD STI LL BE HIT BY EXPLANATION 1(B) TO S. 271(1)(C) OF I.T. ACT AND WOULD BE STILL LIAB LE TO PAY PENALTY U/S 271(1)(C) OF I.T. ACT. MERELY BECAUSE THE ASSESSEE DELAYED TH E FILING OF REVISED RETURN OF INCOME (FOR ASSTT. YEAR 2005-06 AND 2006-07) TILL 3 1.10.2007, I.E. TILL THE TIME OF FILING OF RETURN FOR ASSTT. YEAR 2007-08 EVEN AF TER RECEIVING QUESTIONNAIRE DATED 4.7.2007 ; THE ASSESEE CANNOT CLAIM FAVOURABL E CONSIDERATION. ONES OWN MISTAKE OR DELAY CANT BE USED TO ADVANCE ONES CAU SE. IN LAW, NOBODY CAN CLAIM THE BENEFIT OF DELAYS OR MISTAKES ON HIS OWN PART; THOUGH IT MAY ADVANCE THE CAUSE OF THE OTHER SIDE. 4. IN VIEW OF THE ABOVE, PENALTIES LEVIED U/S 271(1)(C ) OF I.T. ACT BY THE LD. AO FOR BOTH ASSTT. YEARS 2005-06 AND 2006-07 ; AND UPHELD BY THE LD. CIT(A) FOR BOTH THESE YEARS ARE HEREBY CONFIRMED. W E UPHOLD THE ORDERS OF THE LOWER AUTHORITIES FOR BOTH ASSTT. YEARS 2005-06 AND 2006-07 AND DISMISS THE APPEALS FILED BY THE ASSESSEE FOR BOTH ASSTT. YEAR 2005-06 AND 2006-07. (B.1) RELEVANT PORTION OF M.A. NO. 109/DEL/2017 IS REPROD UCED AS UNDER: 1. THE APPELLANT COMPANY IS IN RECEIPT OF CONSOLIDATED ORDER OF HON'BLE ITAT DATED 11.08.2016 FOR A.Y. 2005-06 & 2006-07 FOR THE REASO N THAT FOR BOTH THE ASSESSMENT YEARS IN APPEAL BEFORE HON'BLE ITAT, THE ASSESSEE COMPANY FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 10 OF 34 (APPELLANT) HAD CONTESTED THE LEVY OF PENALTY FOR C ONCEALMENT U/S 271(1 )(C) BY THE LD. ASSESSING OFFICER ON THE GROUND OF FURNISHI NG OF INACCURATE PARTICULARS OF INCOME IN THE MATTER OF CLAIM OF DEDUCTION U/S 80-I B OF THE INCOME TAX ACT, 1961, IN THE ORIGINAL RETURN OF INCOME FOR THE ABOVE ASSE SSMENT YEARS, WHICH WAS LATER SUO-MOTU AND BONA-FIDELY WITHDRAWN BY THE ASSESSEE, BY WAY OF FILING REVISED RETURN OF INCOME. BRIEF FACTS OF THE CASE: FACTS RELATING TO PENALTY ORDER BV LD. AO AND APPEL LATE ORDER OF CIT(APPEAL) FOR A.Y. 2005-06 2. TO BRIEFLY RE-CAPITULATE, IN THE ORIGINAL RETURN OF INCOME FILED BY THEASSESSE FOR A.Y. 2005-06 ON 31.10.2005 THE ASSESSEE HAD SHOWN INCOME AT RS. 65,99,767/- AND MADE A CLAIM OF DEDUCTION U/S 80-IB OF THE INCOME T AX ACT FOR AN AMOUNT OF RS. 28,28,472/-.THAT THE ASSESSEE COMPANY ON 31.10.2007 FILED A REVISED RETURN U/S 139(5), WITHDRAWING THE CLAIM OF DEDUCTION OF RS. 2 8,28,472/-. IN THE INTERREGNUM, THE ONLY ACT ON PART OF THE LD. AO HAD BEEN TO ISSU E QUESTIONNAIRE DATED 04.07.2007 WHEREIN IN POINT NO. 6 THE ASSESSEE WAS ASKED TO GIVE DETAILS OF EXEMPTIONS AND DEDUCTIONS CLAIMED IN THE RETURN. TH E LD. AO HOWEVER TREATED THE REVISED RETURN OF INCOME, AS NOT FILED, ON THE GROU ND THAT IT WAS SUBMITTED BEYOND THE STATUTORY TIME LIMIT. THE LD. AO HENCE DISALLOW ED THE CLAIM OF DEDUCTION U/S 80- IB FOR RS. 28,28,472/- VIDE ORDER DATED 30.11.2 007 AND ALSO INITIATED PENALTY FOR CONCEALMENT U/S 271(1) (C). 2.1 SUBSEQUENTLY, PENALTY U/S 271(L)(C) WAS LEVIED BY T HE LD. AO VIDE ORDER DATED 28.03.2011 ON THE GROUND THAT THE ASSESSEE COMPANY WAS ITSELF AWARE THAT IT DID NOT FULFILL THE CONDITIONS SPECIFIED IN SECTION 80- IB OF THE INCOME TAX ACT AND THEREFORE THE FILING OF THE REVISED RETURN WAS ALSO NOT CORRECT. THAT FURTHER DURING THE PENALTY PROCEEDINGS THE ASSESSEE DID NOT OFFER ANY EXPLANATION REGARDING DISALLOWANCES OF DEDUCTION U/S 80-B AND IMPOSITION OF PENALTY. THE PENALTY ORDER HOWEVER ITSELF RECORDS THAT IT WAS PASSED ONLY UPON ISSUE OF SINGULAR SHOW CAUSE NOTICE(SCN) ISSUED TO THE ASSESSEE DATED 11.01.2011 , FIXING THE CASE FOR HEARING FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 11 OF 34 ON 23.02.2011, ON WHICH DATE THERE WAS NO APPEARANC E ON PART OF THE ASSESSEE. THE FACT OF THE MATTER IS HOWEVER THAT THE SCN COUL D NOT BE REPLIED AS IT WAS SENT ON THE PREVIOUS ADDRESS OF THE ASSESSEE COMPANY. 2.2 IN FIRST APPEAL THE LD. CIT (A) CONFIRMED THE PENAL TY ORDER VIDE APPELLATE ORDER DATED 19.03.2013, WHEREIN HE WAS INTER-ALIA OF THE VIEW THAT IT IS ONLY AFTER THE QUESTIONNAIRE DATED 04.07.2007 WAS ISSUED BY THE LD . AO ASKING THE ASSESSEE TO GIVE DETAILS OF EXEMPTION AND DEDUCTION CLAIMED AND ALSO TO CLARIFY AS TO WHY THE CLAIM SHOULD BE ACCEPTED BY THE DEPARTMENT, THAT TH E APPELLANT WITHDREW THE CLAIM OF DEDUCTION U/S 80-IB. THE LD. CIT(A) ALSO O BSERVED THAT THE APPELLANT HAS FAILED TO PROVE THAT IT'S CLAIM OF DEDUCTION U/S 80 -IB, MADE IN THE ORIGINAL RETURN FILED WAS NOT DUE TO FRAUD OR NEGLECT. IN PARA 4.6 OF THE ORDER THE LD. CIT (A) FURTHER OBSERVED THAT THE APPELLANT HAS FAILED TO P ROVIDE ANY EXPLANATION OR INFORMATION/PARTICULARS ABOUT THE ELIGIBILITY CRITE RIA ON THE BASIS ON WHICH THE DEDUCTION WAS CLAIMED AND ON WHAT BASIS IT WAS REAL IZED (AT THE TIME OF FILING IT RETURN FOR A.Y. 2007-08 ) THAT SUCH DEDUCTION IS NO T AVAILABLE. THAT SINCE THE APPELLANT HAS NEITHER EXPLAINED NOR SUBSTANTIATED W ITH ANY SUPPORTING EVIDENCE AS TO WHAT IS THE DIFFERENCE OF THE OPINION THEREFORE IT HAS FAILED TO SUBSTANTIATE/ PROVE THAT ITS EXPLANATION IS BONA-FIDE IN TERMS OF EXPLANATION-L(B) TO SECTION 271(L)(C) OF THE INCOME TAX ACT. ORDER OF THE HON'BLE ITAT IN ITA NO. 3G53/DEL/2Q13 F PR HG A.Y. 2005- 06 3. THE HON'BLE ITAT HAS VIDE ITS ORDER IN ITA NOS. 395 3/DEL/2013 FOR A.Y. 2005-06 HAS INTER-ALIA IN PARAS 3.1, 3.2, 3.2.1 & 3.2.2 CONFIRMED THE LEVY OF PENALTY ON THE FOLLOWING GROUNDS/ REASONING:- (A) THAT THE WITHDRAWAL OF CLAIM U/S 80-IB OF THE ACT W AS MADE BY THE ASSESSEE ONLY AFTER QUESTIONNAIRE WAS ISSUED ON 04.07.2007 BY TH E AO FOR A.Y. 2005-06, WHEREIN THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF AL L EXEMPTIONS AND DEDUCTION CLAIMED BY IT IN THE RETURN OF INCOME AND TO CLARIFY AS TO WHY THE DEDUCTION / EXEMPTION CLAIMED BY IT SHOULD BE ACCEPTED BY THE DEPARTMENT. FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 12 OF 34 (B) THAT AT NO STAGE EITHER BEFORE THE LOWER AUTHORITI ES OR BEFORE THE ITAT, THE ASSESSEE HAS OFFERED ANY EXPLANATION OR INFORMATION / PARTIC ULARS ABOUT THE ELIGIBILITY CRITERIA ON THE BASIS OF WHICH THE DEDUCTION UNDER SECTION 80-I B WAS CLAIMED BY THE ASSESSEE, IN THE ORIGINAL RETURN OF INCOME. (C) THAT THOUGH THE ASSESSEE HAS CLAIMED THAT IT CAME T O HIS KNOWLEDGE AT THE TIME OF FILING OF RETURN FOR A.Y. 2007-08 THAT DEDUCTION U/ S 80-IB WAS NOT AVAILABLE TO THE ASSESSEE, THE ASSESSEE HAS NOT PROVIDED ANY EXPLANA TION OR INFORMATION/ PARTICULARS AS TO ON WHAT BASIS IT REALIZED THAT DEDUCTION U/S 80-IB WAS NOT AVAILABLE TO IT. 3.1 THAT IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES T HAT THE HON'BLE ITAT HAS HELD THAT THE CASE OF THE ASSESSEE IS COVERED HIT BY EXP LANATION-1 (B) OF SECTION 271(L)(C) AS IT HAD FILED THE REVISED RETURN WITHDR AWING THE CLAIM OF DEDUCTION U/S 80-IB ONLY WHEN IT WAS FACED WITH THE QUERY RAISED BY THE REVENUE DURING THE ASSESSMENT PROCEEDING A.Y. 2005-06 TO JUSTIFY SUCH CLAIM AND NOT BECAUSE SUBSEQUENTLY AT THE TIME OF FILING RETURN OF A.Y. 2 007-08 THE ASSESSEE HAD ON ITS OWN REALIZED THAT DEDUCTION U/S 80-IB NO T ADMISSIBLE, AS IS BEING 4. IT IS SUBMITTED WITH EXTREME HUMILITY THAT THERE HA S BEEN A MISTAKE APPARENT FROM RECORD AS THE HON'BLE ITAT HAS INADVERTENTLY M ISSED OUT TO CONSIDER THE PAPER-BOOK DATED 08.07.2016 FILED IN DUPLICATE BEFORE THE HON'BLE TRIBUNAL (WITH ONE COPY TO THE DEPARTMENTAL COUNSEL ) CONTAINING SYNOPSIS DETAILING THE REASONS FOR MAKING THE INITI AL CLAIM OF DEDUCTION U/S 80-IB AS ALSO THE CONFLICTING VIEW WHICH WAS THE REASON D 'ETRE FOR SUO-MOTU WITHDRAWAL OF THE CLAIM OF DEDUCTION. THE DOCUMENTS IN THE PAPER- BOOK INTER-ALIA CONTAINED THE CONDITIONS FOR CLAIM OF SECTION 80-IB AS APPEARING IN THE INCOME TAX ACT RELEVANT FOR THE PERIOD 2004 ; THE EXCERPTS FRO M THE DECISION OF THE HON'BLE SUPREME COURT IN CASE OF CIT VS. MEGHALAYA STEELS L TD. (67 TAXMAN.COM 158) ; COPY OF RELEVANT PART OF DIRECT TAXES LAW AND PRACT ICE RECKONER & COPY OF SHARE HOLDING PATTERN OF THE ASSESSEE (APPELLANT) WHICH W ERE ALSO SUPPORTED BY THE ORAL FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 13 OF 34 SUBMISSIONS MADE BY THE COUNSEL OF THE ASSESSEE BEF ORE THE HON'BLE BENCH OF ITAT WHEREIN THE REASONS FOR THE INITIAL CLAIM OF D EDUCTION U/S 80-IB AS ALSO SUBSEQUENT SUO-MOTU WITHDRAWAL BY WAY OF REVISED RE TURN FOR BOTH A.Y. 2005-06 AND 2006-07, WAS EXPLAINED. 4.1 THAT THE ASSESSEE COMPANY IS A JOINT VENTURE COMPAN Y / INDUSTRIAL UNDERTAKING ENGAGED IN THE BUSINESS OF MANUFACTURING OF CENTRIF UGAL FANS, WHICH BEING ARTICLE OR THING SPECIFIED IN THE ELEVENTH SCHEDULE OF THE INCOME TAX ACT, 1961 IS NOT ELIGIBLE FOR CLAIM OF DEDUCTION U/S 80- IB UNLESS I T HAPPENS TO BE A 'SMALL SCALE INDUSTRIAL UNDERTAKING' OR AN 'INDUSTRIAL UNDERTAKI NG REFERRED TO SUB-SECTION 4 OF SECTION 80-IB - 'THAT 'SMALL SCALE INDUSTRIAL UNDERTAKING' FOR THE PURPOSES OF SECTION 80-IB HAS BEEN DEFINED IN CLAUS E (G) TO SUB SECTION 14 OF SECTION 80-IB WHICH MEANS AN INDUSTRIAL UNDER TAKING WHICH IS ON THE LAST DAY OF THE PREVIOUS IS YEAR REGARDED AS SM ALL SCALE UNDERTAKING U/S 11B OF THE INDUSTRIES (DEVELOPMENT AND REGULATIO N) ACT, 1951. 4.2 THAT THE ASSESSEE COMPANY ON A BONA-FIDE CONSIDERAT ION OF THE PROVISION OF SECTION 11B OF THE SAID PERMISSION OF INDUSTRIES (D EVELOPMENT AND REGULATION ) ACT, 1951QUALIFIED AS 'SMALL SCALE UNDERTAKING' THE REFORE THE CLAIM OF DEDUCTION U/S 80-IB WAS MADE BY IT IN THE ORIGINAL INCOME TAX RETURNS FOR BOTH A.Y. 2005-06 AS WELL AS A.Y. 2006-07. 4.3 THAT IT WAS AT THE TIME OF PREPARATION OF THE INCOM E TAX RETURN FOR A.Y. 2007-08 THAT IT WAS NOTICED BY THE MANAGEMENT OF THE ASSESS EE COMPANY THAT IN TERMS OF THE NOTIFICATION ISSUED BY THE DEPARTMENT OF INDUST RIAL POLICY AND PROMOTION DATED 10.12.1997 UNDER SUB-SECTION (3) OF 1 IB OF THE IND USTRIES (DEVELOPMENT AND REGULATION) ACT, 1951 THAT 'NO SMALL SCALE INDUSTRIAL UNDERTAKING SHALL BE SUBSIDIARY OF. OR OWNED OR CONTROLLED BY ANY OTHER INDUSTRIAL UNDERTAKING. 4.4 THAT IN THE FACTS OF THE CASE OF THE APPELLANT COMP ANY SINCE THE ASSESSEE COMPANY IS A JOINT VENTURE COMPANY WHERE 50% OF THE SHAREHO LDING EACH STANDS IN THE FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 14 OF 34 NAME OF 'CARYAIRE EQUIPMENTS INDIA PVT. LTD.' & 'NI CTORA GEBHARDT SPA' (AS PER THE SHARE HOLDING PATTERN OF THE ASSESSEE /APPELLAN T, NICTORA INDIA PVT. LTD. PAGE 7 OF THE PAPER-BOOK DATED 08.07.2016) THAT THE MANAGEMENT OF THE ASSESSEE COMPANY WAS OF THE CONSIDERED VIEW NOT TO CLAIM THE DEDUCTION U/S 80-IB, EVEN THOUGH THE INDIAN UNDERTAKING NAMELY CARVAIRE EQUIP MENTS INDIA PVT. LTD (HEREINAFTER REFERRED AS CEIPL) WAS NOT CONTRO LLING THE INDUSTRIAL UNDERTAKING OF THE ASSESSEE COMPANY' AND THEREFORE SUCH CLAIM OF DEDUCTION WAS RIGHTFULLY ELIGIBLE TO THE ASSESSEE C OMPANY AS ONLY 50% OF IT'S SHARES WERE HELD BY THE SAID CARYAIRE EQU IPMENTS INDIA PVT. LTD. THE INCOME TAX RETURNS OF CEIPL, WHICH WERE ALSO FI LED IN THIS PAPER BOOK TO SHOW AND EXPLAIN THAT 80IB DEDUCTION WAS CLAIMED BY THE MANAGEMENT OF CEIPL, WHICH HAS A 50% STAKE IN THE NICTORA INDIA PVT. LTD. AND NIPL IS ALSO SIMILAR TYPE OF INDUSTRIAL UNDERTAKING FOR THE PURPOSE OF 80IB, IT CLEARLY SHOW THAT MANAGEMENT HAS ACTED BONA-FIDE WITHOUT ANY MALA-FIDE. 5. IT IS SUBMITTED THAT THE ABOVE REASONS WERE RE-PROD UCED AND HIGHLIGHTED ON PAGE 4 OF THE PAPER BOOK FILED BEFORE THE HON'BLE ITAT ON 08.07.2016 AND THE SHARE HOLDING PATTERN OF THE ASSESSEE COMPANY AS ON PAGE 7 OF THE SAID PAPER BOOK WAS ALSO FILED AND SUCH REASONS WERE ORALLY SUBMITTED B Y THE COUNSEL OF THE ASSESSEE BEFORE THE HON'BLE TRIBUNAL DURING THE COURSE OF HE ARING ON 25.07.2016, WHICH WOULD EXPLAIN THE BONA-FIDES OF THE ASSESSEE COMPAN Y WHILE MAKING THE CLAIM OF DEDUCTION. THAT THE CLAIM WAS SUBSEQUENTLY SUO-MOTU WITHDRAWN BY WAY OF FILING REVISED RETURN BOTH FOR ASSESSMENT YEARS 2005-06 AN D 2006-07, ONLY BY WAY OF ABUNDANT CAUTION, EVEN THOUGH IN HIND SIGHT IT TRAN SPIRES THAT THE APPELLANT COMPANY IS LEGALLY AND RIGHTFULLY ENTITLED TO AVAIL THE SAID DEDUCTION. 5.1THE CONDITIONALITIES FOR CLAIM OF DEDUCTION U/S 80-IB IS A COMPLICATED LAW TO COMPREHENDED AND MORE SO WHEN PROVISIONS OF INDUSTR IES (DEVELOPMENT AND REGULATION ) ACT, 1951 AND NOTIFICATION ISSUED THER EIN ARE TO BE READ ALONGWITH IT. FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 15 OF 34 THAT SEEN IN THE CONTEXT OF THE ABOVE EXPLANATION O F THE ASSESSEE APPELLANT, WHICH WAS ON RECORD BEFORE THE HON'BLE ITAT, FOR WITHDRAW ING THE CLAIM OF DEDUCTION U/S 80-IB, THE CASE OF THE APPELLANT IS A BONA-FIDE EXP LANATION COVERED WITHIN THE MEANING OF EXPLANATION -1 (B) OF SECTION 271(L)(C) , AND DOES NOT CALL FOR IMPOSITION OF PENALTY FOR CONCEALMENT OF INCOME AND WHICH MAY KINDLY BE CONSIDERED FOR RECTIFYING THE MISTAKE APPARENT ON RECORD. 5.2 THAT THE HON'BLE ITAT MAY ALSO KINDLY CONSIDER THE FACT THAT MUCH EMPHASIS IS GIVEN TO THE QUESTIONNAIRE DATED 04.07.2007 ISSU ED IN CASE OF THE ASSESSEE FOR A.Y. 2005-06, CALLING FOR THE DETAILS OF ALL EXEMPT ION AND DEDUCTION CLAIMED AND TO ALSO CLARIFY AS TO WHY THE SAME SHOULD BE ACCEPTED, IS A STEREO TYPED INNOCUOUS ONE OUT OF TOTAL 21 QUERIES AND NO FOLLOW UP OF THI S ISSUE WAS UNDERTAKEN BY THE LD. AO DURING THE ASSESSMENT PROCEEDING AND THEREFO RE THE VIEW OF THE LD. AO AND CIT (A) AS CONFIRMED BY THE HON'BLE ITAT THAT I T WAS THIS QUESTIONNAIRE WHICH TRIGGERED THE FILING OF REVISED RETURN OF INCOME BY THE ASSESSEE FOR A.Y. 2005-06 IS NOT SUPPORTED FROM THE OVERALL FACTS AND CIRCUMSTAN CES OF THE CASE, WHICH MAY ALSO BE CONSIDERED FOR RECTIFICATION ON THE ORDER. THAT WHILE THE ITR WAS SUO-MOTU REVISED BY THE APPELLANT COMPANY ON 31.10.2007 ITSE LF AND THE ASSESSMENT ORDER WAS PASSED ON 30.11.2007, NO SEPARATE SHOW-CAUSE NO TICE WAS EVER ISSUED TO THE ASSESSEE COMPANY CALLING FOR THE JUSTIFICATION EITH ER FOR THE CLAIM OR WITHDRAWAL OF DEDUCTION U/S 80IB. PRAYER 6. IT IS THUS PRAYED BEFORE THE HON'BLE TRIBUNAL THAT THE MISTAKE APPARENT ON RECORD AS SUBMITTED IN PRECEDING PARAS MAY KINDLY BE CONSI DERED FOR RECTIFICATION AND CONSEQUENTIAL RECONSIDERATION OF THE ORDER OF THE H ON'BLE TRIBUNAL . (B.2) RELEVANT PORTION OF M.A. NO. 110/DEL/2017 IS REPRO DUCED AS UNDER: 1. THE APPELLANT COMPANY IS IN RECEIPT OF CONSOLIDATE D ORDER OF HON'BLE ITAT DATED 11.08.2016 FOR A.Y. 2005-06 & 2006-07. IN BOT H THE ASSESSMENT YEARS IN APPEAL BEFORE HON'BLE ITAT, THE ASSESSEE COMPANY (A PPELLANT) HAD CONTESTED FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 16 OF 34 THE LEVY OF PENALTY FOR CONCEALMENT U/S 271(1 )(C) BY THE LD. ASSESSING OFFICER ON THE GROUND OF FURNISHING OF INACCURATE PARTICULA RS OF INCOME IN THE MATTER OF CLAIM OF DEDUCTION U/S 80-IB OF THE INCOME TAX ACT, 1961, IN THE ORIGINAL RETURN OF INCOME FOR THE ABOVE ASSESSMENT YEARS, WHICH WAS LATER SUO-MOTU AND BONA-FIDELY WITHDRAWN BY THE ASSESSEE, BY WAY OF FI LING REVISED RETURN OF INCOME. BRIEF FACTS OF THE CASE: FACTS RELATING TO PENALTY ORDER BY AO & APPELLATE O RDER OF CIT(A) FOR A.Y. 2006-07 2. TO BRIEFLY RE-CAPITULATE, IN THE ORIGINAL RETURN OF INCOME ELECTRONICALLY FILED BY THE ASSESSEE COMPANY FOR A.Y. 2006-07ON 01.11.2006 THE ASSESSEE HAD DECLARED INCOME AT RS. 1,05,38,552/- WHEREIN A CLAI M OF DEDUCTION U/S 80- IB OF THE INCOME TAX ACT FOR AN AMOUNT OF RS. 45,16,52 3/- WAS MADE. THAT THE ASSESSEE ON 31.10.2007 FILED A REVISED RETURN U/S 1 39(5), WITHDRAWING THE CLAIM OF DEDUCTION OF RS. 45,16,523/-, THEREBY REVI SING THE TOTAL INCOME TO RS. 1,50,55,075/- . IN THE INTERREGNUM, THE ONLY ACT ON PART OF THE LD. AO HAD BEEN TO ISSUE NOTICE U/S 143(2) OF THE INCOME TAX A CT, 1961, SELECTING THE CASE FOR SCRUTINY ASSESSMENT. THE REVISED RETURN WA S SUBSEQUENTLY PROCESSED U/S 143(1) VIDE INTIMATION DATED 08.12.2008 AT THE DECLARED REVISED INCOME. NOTICE U/S 142(1) OF THE INCOME TAX ACT WAS ISSUED DATED 10.03.2008 AND SUBSEQUENTLY NOTICES U/S 143(2) WERE ALSO ISSUED IN RESPONSE TO WHICH THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE COMPANY F ILED NECESSARY DETAILS / DOCUMENTS AS CALLED FOR FROM TIME TO TIME. THE LD. AO IN PARA 3.2 OF THE ASSESSMENT ORDER DATED 18.12.2008 HAS NOTED THAT 'T HOUGH THE REVISE RETURN OF INCOME WAS FILED WELL WITHIN THE TIME PERMISSIBL E U/S 139(5) OF THE INCOME TAX ACT, HOWEVER, THE SAME WAS NOT FILED SUO-MOTO B UT WAS FILED ON THE INSTANCE OF DEPARTMENT I.E. WHEN THE ISSUE RELATING TO ALLOWABILITY OF DEDUCTION U/S 80-IB OF INCOME TAX ACT, WAS CONFRONTED WITH TH E ASSESSEE IN THE A.Y. 2005-06 VIDE QUESTIONNAIRE DATED 04.07.2007'. THE L D. AO VIDE ORDER DATED 18.12.2008 ASSESSED THE INCOME AS DECLARED BY THE A SSESSEE IN THE REVISE RETURN FILED FOR AN AMOUNT OF RS. 1,50,55,080/-. TH E LD. AO HOWEVER INITIATED PENALTY PROCEEDINGS U/S 271(L)(C) ON THE GROUND THA T THE ASSESSE HAS FURNISHED INACCURATE PARTICULARS OF INCOME IN IT'S ORIGINAL R ETURN OF INCOME FILED ON 01.11.2006. 2.1 SUBSEQUENTLY, PENALTY U/S 271 (1 )(C) WAS LEVIE D BY THE LD. AO VIDE ORDER DATED 22.02.2012. IN THIS ORDER THE SUBMISSIONS OF THE ASSESSEE WERE REJECTED BY THE LD. AO WITHOUT ASSIGNING ANY REASONSAND OBSE RVING THAT AFTER INTRODUCTION OF EXPLANATION TO SECTION 271(1)(C) TH E ONUS TO PROVE THAT THERE WAS NO FRAUD OR NEGLECT IN FILING THE CORRECT INCOM E WAS ON THE ASSESSEE AND NOT ON REVENUE. IT WAS ALSO HELD THAT IN THE STATED FACTS AND CIRCUMSTANCES, IT IS ESTABLISHED BEYOND DOUBT THAT THE ASSESSEE HAS F URNISHED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS. 45,16,52 3/- ON ACCOUNT OF DEDUCTION FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 17 OF 34 U/S 80-IB OF THE I. T. ACT AND HAS ALSO FAILED TO D ISCHARGE IT'S ONUS OF PROVING THAT THERE WAS NO FRAUD OR NEGLECT IN FILING THE CO RRECT INCOME. 2.2 IN FIRST APPEAL THE LD. CIT (A) CONFIRMED THE P ENALTY ORDER VIDE APPELLATE ORDER DATED 19.03.2013, WHEREIN HE WAS INTER-ALIA O F THE VIEW THAT IT IS ONLY AFTER THE QUESTIONNAIRE DATED 04.07.2007 WAS ISSUED BY THE AO ASKING THE ASSESSEE TO GIVE DETAILS OF EXEMPTION AND DEDUCTION CLAIMED AND ALSO TO CLARIFY AS TO WHY THE CLAIM SHOULD BE ACCEPTED BY THE DEPAR TMENT, THAT THE APPELLANT WITHDREW THE CLAIM OF DEDUCTION U/S 80-IB. THE LD. CIT(A) ALSO OBSERVED THAT THE APPELLANT HAS FAILED TO PROVE THAT IT'S CLAIM O F DEDUCTION U/S 80-IB, MADE IN THE ORIGINAL RETURN FILED WAS NOT DUE TO FRAUD OR N EGLECT. IN PARA 4.5 OF THE ORDER THE LD. CIT (A) FURTHER OBSERVED THAT THE APP ELLANT HAS FAILED TO PROVIDE ANY EXPLANATION OR INFORMATION/PARTICULARS ABOUT TH E ELIGIBILITY CRITERIA ON THE BASIS ON WHICH THE DEDUCTION WAS CLAIMED AND HOW OR ON WHAT BASIS IT WAS REALIZED (AT THE TIME OF FILING IT RETURN FOR A.Y. 2007-08) THAT SUCH DEDUCTION IS NOT AVAILABLE. THAT THE APPELLANT HAS SUBMITTED THA T THE CLAIM WAS WITHDRAWN ON ACCOUNT OF DIFFERENCE OF OPINION. HOWEVER, WHAT IS THE DIFFERENCE OF OPINION HAS NEITHER BEING EXPLAINED NOR BEING SUBSTANTIATED WITH ANY SUPPORTING EVIDENCE. THEREFORE IT HAS FAILED TO SUBSTANTIATE/ PROVE THAT ITS EXPLANATION IS BONA-FIDE IN TERMS OF EXPLANATION -1(B) TO SECTION 271(1)(C) OF THE INCOME TAX ACT. ORDER OF THE HON'BLE ITAT IN ITA NO. 3954/PEL/2Q13 F A.Y. 2QQ6-07) 3. THE HON'BLE ITAT HAS VIDE ITS ORDER IN ITA NOS. 395 4/DEL/2013 FOR A.Y.2006- 07 HAS INTER-ALIA IN PARAS 3.1. 3.2 . 3.2.1 & 3.2.2 CONFIRMED THE LEVY OF PENALTY ON THE FOLLOWING GROUNDS / REASONING:- (A) THAT THE WITHDRAWAL OF CLAIM U/S 80-IB OF THE ACT W AS MADE BY THE ASSESSEE FOR ASSESSMENT YEAR 2006-07 ONLY AFTER QUESTIONNAIR E WAS ISSUED ON 04.07.2007 BY THE LD. AO FOR A.Y. 2005-06, WHEREIN THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF ALL EXEMPTIONS AND DEDUCTION CLAIMED BY IT IN THE RETURN OF INCOME AND TO CLARIFY AS TO WHY THE DEDUCTION / EXEMPTION CLAIMED BY IT SHOULD BE ACCEPTED BY THE DEPARTMENT. (B) THAT AT NO STAGE EITHER BEFORE THE LOWER AUTHORITI ES OR BEFORE THE ITAT, THE ASSESSEE HAS OFFERED ANY EXPLANATION OR INFORMATION / PARTICULARS ABOUT THE ELIGIBILITY CRITERIA ON THE BASIS OF WHICH THE DEDU CTION UNDER SECTION 80-IB WAS CLAIMED BY THE ASSESSEE, IN THE ORIGINAL RETURN OF INCOME. (C) THAT THOUGH THE ASSESSEE HAS CLAIMED THAT IT CAME T O HIS KNOWLEDGE AT THE TIME OF FILING OF RETURN FOR A.Y. 2007-08 THAT DEDU CTION U/S 80-IB WAS NOT AVAILABLE TO THE ASSESSEE, THE ASSESSEE HAS NOT PRO VIDED ANY EXPLANATION OR INFORMATION / PARTICULARS AS TO ON WHAT BASIS IT RE ALIZED THAT DEDUCTION U/S 80- IB WAS NOT AVAILABLE TO IT. 3.1 THAT IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES T HAT THE HON'BLE FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 18 OF 34 ITAT HAS HELD THAT THE CASE OF THE ASSESSEE IS COVE RED HIT BY EXPLANATION-1 (B) OF SECTION 271(L)(C) AS IT HAD FILED THE REVISED RE TURN WITHDRAWING THE CLAIM OF DEDUCTION U/S 80-IB ONLY WHEN IT WAS FACED WITH THE QUERY RAISED BY THE REVENUE DURING THE ASSESSMENT PROCEEDING A.Y. 2005- 06 TO JUSTIFY SUCH CLAIM AND NOT BECAUSE SUBSEQUENTLY AT THE TIME OF FILING RETURN OF A.Y. 2007-08 THE ASSESSEE HAD ON ITS OWN REALIZED THAT D EDUCTION U/S 80- IB NOT ADMISSIBLE, AS IS BEING CLAIMED BY THE ASSES SEE. SUBMISSIONS 4. IT IS SUBMITTED WITH EXTREME HUMILITY THAT THERE HA S BEEN A MISTAKE APPARENT FROM RECORD AS THE HON'BLE ITAT HAS INADVE RTENTLY MISSED OUT TO CONSIDER THE PAPER-BOOK DATED 08.07.2016 FIL ED IN DUPLICATE BEFORE THE HON'BLE TRIBUNAL (WITH ONE COPY TO THE D EPARTMENTAL COUNSEL! CONTAINING SYNOPSIS DETAILING THE REASONS FOR MAKING THE INITIAL CLAIM OF DEDUCTION U/S 80-IB AS ALSO THE CONFLICTING VIEW WHICH WAS THE REASON D'ETRE FOR SUO-MOTU WITHDRAWAL OF THE CL AIM OF DEDUCTION. THE DOCUMENTS IN THE PAPER-BOOK INTER-ALIA CONTAINED TH E CONDITIONS FOR CLAIM OF SECTION 80-IB AS APPEARING IN THE INCOME TAX ACT RE LEVANT FOR THE PERIOD 2004 ; THE EXCERPTS FROM THE DECISION OF THE HON'BLE SUP REME COURT IN CASE OF CIT VS. MEGHALAYA STEELS LTD. (67 TAXMAN.COM 158) ; COP Y OF RELEVANT PART OF DIRECT TAXES LAW AND PRACTICE RECKONER © OF SHA RE HOLDING PATTERN OF THE ASSESSEE (APPELLANT) WHICH WERE ALSO SUPPORTED BY T HE ORAL SUBMISSIONS MADE BY THE COUNSEL OF THE ASSESSEE BEFORE THE HON'BLE B ENCH OF ITAT WHEREIN THE REASONS FOR THE INITIAL CLAIM OF DEDUCTION U/S 80-I B AS ALSO SUBSEQUENT SUO- MOTU WITHDRAWAL BY WAY OF REVISED RETURN FOR BOTH A .Y. 2005-06 AND 2006-07, WAS EXPLAINED. 4.1 THAT THE ASSESSE COMPANY IS A JOINT VENTURE COMPANY / INDUSTRIAL UNDERTAKING ENGAGED IN THE BUSINESS OF MANUFACTURING OF CENTRIF UGAL FANS, WHICH BEING ARTICLE OR THING SPECIFIED IN THE ELEVENTH SCHEDULE OF THE INCOME TAX ACT, 1961 IS NOT ELIGIBLE FOR CLAIM OF DEDUCTION U/S 80-IB UN LESS IT HAPPENS TO BE A 'SMALL SCALE INDUSTRIAL UNDERTAKING' OR AN 'INDUSTRIAL UND ERTAKING REFERRED TO SUB- SECTION-4 OF SECTION 80-IB.' THAT 'SMALL SCALE INDUSTRIAL UNDERTAKING' FOR THE PURPOSES OF SECTION 80-IB HAS BEEN DEFINED IN CLAUSE FA) TO SUB SECTION 14 OF SECTION 80-IB WHICH MEANS AN INDU STRIAL UNDERTAKING WHICH IS ON THE LAST DAV OF THE PREVIOU S IS YEAR REGARDED AS SMALL SCALE UNDERTAKING U/S 11B OF THE INDUSTRIES (DEVELOPMENT AND REGULATION 1 ACT. 1951. 4.2 THAT THE ASSESSE COMPANY ON A BONA-FIDE CONSIDERAT ION OF THE PROVISION OF SECTION 11B OF THE SAID PERMISSION OF INDUSTRIES (D EVELOPMENT AND REGULATION ) ACT, 1951QUALIFIED AS 'SMALL SCALE UNDERTAKING TH EREFORE THE CLAIM OF DEDUCTION U/S 80- IB WAS MADE BY IT IN THE ORIGINAL INCOME TAX RETURNS FOR A.Y. 2005-06 & 2006-07. 4.3 THAT IT WAS AT THE TIME OF PREPARATION OF THE INCOM E TAX RETURN FOR A.Y. 2007- 08 THAT WHEN IT WAS NOTICED BY THE MANAGEMENT OF TH E ASSESSEE COMPANY THAT IN TERMS OF THE NOTIFICATION ISSUED BY THE DEPARTME NT OF INDUSTRIAL POLICY AND PROMOTION DATED 10.12.1997 UNDER SUB- SECTION (3) O F 11B OF THE INDUSTRIES FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 19 OF 34 (DEVELOPMENT AND REGULATION) ACT, 1951 THAT 'NO SMALL SCALE INDUSTRIAL UNDERTAKING SHALL BE SUBSIDIARY OF, OR OWNED OR CON TROLLED BY ANY OTHER INDUSTRIAL UNDERTAKING.' 4.4 THAT IN THE FACTS OF THE CASE OF THE APPELLANT COMP ANY SINCE IT IS A JOINT VENTURE COMPANY WHERE 50% OF THE SHAREHOLDING EACH STANDS I N THE NAME OF 'CARYAIRE EQUIPMENTS INDIA PVT. LTD. NICTORA GEBHARDT SPA' (A S PER THE SHARE HOLDING PATTERN OF THE ASSESSEE /APPELLANT, NICTORA INDIA P VT. LTD. - PAGE 7 OF THE PAPER-BOOK DATED 08.07.2016 ) THAT THE MANAGEMENT O F THE ASSESSEE COMPANY WAS OF THE CONSIDERED VIEW NOT TO CLAIM THE DEDUCTI ON U/S 80-IB, EVEN THOUGH THE INDIAN UNDERTAKING NAMELY CARVAIRE EQUIP MENTS INDIA PVT. LTD WAS 'NOT CONTROLLING THE INDUSTRIAL UNDERT AKING OF THE ASSESSEE COMPANY' AND THEREFORE SUCH CLAIM OF DEDUC TION WAS RIGHTFULLY ELIGIBLE TO THE ASSESSEE COMPANY AS ONLY 50% OF IT'S SHARES WERE HELD BY THE SAID 'CARVAIRE EQUIPMENTS INDIA PV T. LTD. ' THE INCOME TAX RETURNS OF CEIPL, WHICH WERE ALSO FI LED IN THIS PAPER BOOK TO SHOW AND EXPLAIN THAT 80IB DEDUCTION WAS CLAIMED BY THE MANAGEMENT OF CEIPL, WHICH HAS A 50% STAKE IN THE NICTORA INDIA P VT. LTD. AND NIPL IS ALSO SIMILAR TYPE OF INDUSTRIAL UNDERTAKING FOR THE PURP OSE OF 80IB,IT CLEARLY SHOW THAT MANAGEMENT HAS ACTED BONA-FIDE WITHOUT ANY MAL A-FIDE. 4.5 IT IS SUBMITTED THAT THE ABOVE REASONS WERE RE-PROD UCED AND HIGHLIGHTED ON PAGE 4 OF THE PAPER BOOK FILED BEFORE THE HON'BLE I TAT ON 08.07.2016 AND THE SHARE HOLDING PATTERN OF THE ASSESSEE COMPANY AS ON PAGE 7 OF THE SAID PAPER BOOK WAS ALSO FILED AND SUCH REASONS WERE ORALLY SU BMITTED BY THE COUNSEL OF THE ASSESSEE BEFORE THE HON'BLE TRIBUNAL DURING THE COURSE OF HEARING ON 25.07.2016, WHICH WOULD EXPLAIN THE BONA-FIDES OF T HE ASSESSEE COMPANY WHILE MAKING THE CLAIM OF DEDUCTION. THAT THE CLAIM WAS S UBSEQUENTLY SUO-MOTU WITHDRAWN BY WAY OF FILING REVISED RETURN FOR A.Y. 2005-06 AND 2006-07, ONLY BY WAY OF ABUNDANT CAUTION, EVEN THOUGH IN HIND SIG HT IT TRANSPIRES THAT THE APPELLANT COMPANY IS LEGALLY AND RIGHTFULLY ENTITLE D TO AVAIL THE SAID DEDUCTION. 4.6 THAT THE CONDITIONALITIES FOR CLAIM OF DEDUCTION U/ S 80-IB IS A COMPLICATED LAW TO COMPREHENDED AND MORE SO WHEN PROVISIONS OF INDU STRIES (DEVELOPMENT AND REGULATION ) ACT, 1951 AND NOTIFICATION ISSUED THEREIN ARE TO BE READ ALONGWITH IT. THAT SEEN IN THE CONTEXT OF THE ABOVE EXPLANATION O F THE ASSESSEE APPELLANT, WHICH WAS ON RECORD BEFORE THE HON'BLE ITAT, FOR WI THDRAWING THE CLAIM OF DEDUCTION U/S 80-IB, THE CASE OF THE APPELLANT IS A BONA-FIDE EXPLANATION COVERED WITHIN THE MEANING OF EXPLANATION -1 (B) OF SECTION 271(L)(C) , AND DOES NOT CALL FOR IMPOSITION OF PENALTY FOR CONCEAL MENT OF INCOME AND WHICH MAY KINDLY BE CONSIDERED FOR RECTIFYING THE MISTAKE APPARENT ON RECORD. 5. THAT THE HON'BLE ITAT MAY ALSO KINDLY CONSIDER THE FACT THAT WHILE THE GROUNDS OF APPEAL FILED BY THE APPELLANT AGAINST THE PENALT Y ORDER FOR A.Y. 2006-07 IS SIMILAR TO THAT OF THE GROUNDS OF APPEAL IN CASE OF A.Y. 2005-06, BUT THE CASE OF THE ASSESSEE FOR A.Y. 2006-07 STANDS ON A ENTIRE LY DIFFERENT FOOTING IN AS MUCH AS WHILE THE ORIGINAL RETURN OF INCOME F OR THIS YEAR WAS FILED ON FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 20 OF 34 01.11.2006 THE REVISED RETURN OF INCOME WITHDRAWING THE CLAIM OF DEDUCTION U/S 80-IB WAS FILED ON 31.10.2007 WHICH IS WELL WIT HIN THE STATUTORY TIME AVAILABLE TO THE ASSESSEE FOR FILING SUCH RETURN U/ S 139(5) OF THE INCOME TAX ACT, 1961, WHICH IN THE FACTS OF THE CASE COULD HAV E BEEN REVISED BY 31.03.2008. 5.1 FROM THE ASSESSMENT ORDER 18.12.2008 IT IS APPARENT THAT THE ORIGINAL RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT ON 12.07.2007 AT THE DECLARED INCOME AND THEREAFTER ON LY A NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961, SELECTING THE CASE FOR SC RUTINY ASSESSMENT, WAS ISSUED ON 12.10.2007. 5.2 THAT FOR ASSESSMENT YEAR 2006-07 THE FIRST QUESTION NAIRE CUM NOTICE U/S 142(1) OF THE INCOME TAX ACT WAS ISSUED ONLY ON 10. 03.2008 IN WHICH THE STEREO TYPED QUESTION IN POINT NO. 4, CALLING FOR T HE ASSESSEE TO FURNISH THE DETAILS OF ALL EXEMPTIONS AND DEDUCTION CLAIMED AND ALSO TO JUSTIFY AS TO WHY THE SAME SHOULD BE ACCEPTED BY THE DEPARTMENT WAS I SSUED AND SERVED. 5.3 IT MAY MOREOVER BE NOTED FROM THE ASSESSMENT ORDER FOR A.Y. 2006-07 THAT EVEN THE AO HAS IN PARA 3.2. THEREOF HELD THAT THE REVISED RETURN FOR THIS ASSESSMENT YEAR IS ON ACCOUNT OF THE QUESTIONNAIRE ISSUED BY THE AO ON 04.07.2007 FOR A.Y. 2005-06 , WHICH CAN NEVER BE THE LEGAL BASIS FOR DENYING THE ASSESSEE HIS STATUTORY RIGHT TO REVISE THE RETURN OF INCOME FOR A.Y. 2006-07. ONCE HE HAS HIMSELF DISCOV ERED THE OMISSION/ WRONG STATEMENT FILED IN THE ORIGINAL RETU RN OF INCOME FOR THIS ASSESSMENT YEAR. MOREOVER UNDER THE INCOME TAX ACT EACH ASSESSMENT YEAR BEING DIFFERENT, THE NOTICE ISSUED U/S 142(1) FOR THE PREVIOUS ASSESSMENT YEAR I.E. 2005-06 CANNOT BE MAD E THE BASIS FOR DENYING THE RIGHT OF THE ASSESSEE TO FILE REVISED R ETURN FOR A SUBSEQUENT ASSESSMENT YEAR. THAT THE HON'BLE ITAT MAY ALSO KINDLY CONSIDER THE FACT THAT REVENUE HAS IS WRONG IN PLACING EMPHASIS ON THE QUESTIONNAIRE DATE D 04.07.2007 ISSUED IN CASE OF THE ASSESSEE FOR A.Y. 2005-06, WHICH HAS NO RELEVANCE FOR A.Y. 2006- 07, WHICH IS AN ENTIRELY DIFFERENT ASSESSMENT YEAR. 5.4 THAT THUS IN FACTS AND CIRCUMSTANCES OF THE CASE IT CANNOT BE SAID THAT THE REVISED RETURN FOR A.Y. 2006-07 WAS NOT SUO-MOTU BU T WAS ON ACCOUNT OF DISCOVERY BY THE LD. AO REGARDING FILING OF INACCUR ATE PARTICULAR OF INCOME FOR THE ASSESSMENT YEAR IN QUESTION. IN THIS CONTEXT TH E BONA-FIDE CLAIM OF THE ASSESSEE THAT THE REVISED RETURN FOR A.Y. 2006-07 I S BASED ON THE RE- APPRECIATION WHILE FILING THE RETURN FOR A.Y. 2007- 08 THAT SUCH CLAIM IS PERHAPS NOT ADMISSIBLE U/S 80-IB, IS A ENTIRELY PLAUSIBLE A ND BONA-FIDE CLAIM OF THE ASSESSEE. THAT WHILE THE ITR WAS SUO-MOTO REVISED BY THE APPE LLANT COMPANY ON 31.10.2007 ITSELF AND THE ASSESSMENT ORDER WAS PASS ED ON 18.12.2008, NO SEPARATE SHOW- CAUSE NOTICE WAS EVER ISSUED TO THE ASSESSEE COMPANY CALLING FOR THE JURISDICTION EITHER FOR THE CLAIM OR WITHDR AWAL OF DEDUCTION U/S 80IB. 5.5 THAT THE REVISED RETURN OF INCOME FOR A.Y. 2006 -07 HAS BEEN AS SUCH ACCEPTED(AND NOT REJECTED UNDER SECTION 139(5) OF T HE ACT ON THE GROUNDS FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 21 OF 34 SPECIFIED THEREIN) AND TAKEN ON RECORD BY THE LD. A O WHILE PASSING THE ORDER U/S 143(3) FOR THIS ASSESSMENT YEAR ON 18.12.2008, WHEREIN THE PROFIT AND GAINS OF BUSINESS AS SHOWN IN THE REVISED RETURN HA S BEEN ACCEPTED AT AN AMOUNT OF RS. 1,50,55,080/- AND THEREFORE FOR THIS REASON ITSELF EVEN THE INITIATION OF THE PENALTY PROCEEDING U/S 271(L)(C) OF THE INCOME TAX ACT, WAS ENTIRELY MISPLACED AND WRONGLY PREMISED. PRAYER 6. IT IS THUS PRAYED THAT SINCE THE FACTS AND CIRCUMST ANCES OF THE CASE IN FILING REVISED RETURN FOR 2006-07 ARE ENTIRELY DIFFERENT T HAN THAT OF A.Y. 2005-06, IT IS PRAYED BEFORE THE HONBLE TRIBUNAL THAT THE PENALTY FOR CONCEALMENT OF INCOME BY FILING INACCURATE PARTICULARS OF INCOME FOR A.Y. 2006-07 SHOULD BE DELETED. (B.3) THE FOLLOWING WRITTEN SUBMISSIONS WERE FILED ON BE HALF OF THE ASSESSEE IN RESPECT OF THE TWO MAS: 1. THAT IT IS HUMBLY SUBMITTED THAT IN PASSING OF T HE ORDER DATED 11.08.2016, THE HONBLE ITAT HAS MISSED OUT TO CONS IDER THE PAPER-BOOK DATED 08.07.2016 FILED IN DUPLICATE BEFORE THE HONBLE TR IBUNAL - WITH ONE COPY TO THE DEPARTMENTAL COUNSEL - CONTAINING SYNOPSIS DETAILIN G THE REASON FOR MAKING THE INITIAL CLAIM OF DEDUCTION U/S 80IB AS ALSO THE REA SON DETRE FOR WITHDRAWAL OF THE CLAIM OF DEDUCTION, WHICH THOUGH LEGALLY ALLOWABLE TO THE APPELLANT, WAS SUO MOTU WITHDRAWN ON ACCOUNT OF ABUNDANT CARE AND CAUTION A ND TO AVOID ANY CONFLICT WITH THE REVENUE ON THE ISSUE. 2. THE DECISION WOULD HAVE BEEN DIFFERENT HAD THE H ONBLE BENCH CONSIDERED THE PAPER BOOK DATED 08.07.2016 AND PASSED TWO SEPA RATE ORDERS AS BOTH YEARS ARE DIFFERENT WITH DIFFERENT FACTS. 3. SINCE THERE ARE TWO SEPARATE ASSESSMENT YEARS I NVOLVED, THEREFORE IT IS HUMBLY PRAYED THAT TWO SEPARATE ORDERS MAY BE PASSE D BY THE HONBLE ITAT AS FACTS ARE DIFFERENT IN TWO ASSESSMENT YEARS. IN AY 2006-07 REVISED RETURN WAS FILED IN TIME BY THE APPELLANT COMPANY. 4. THE DOCUMENTS IN THE PAPER BOOK CONTAINED - I. CONDITIONS FOR CLAIM OF SECTION 80IB AS APPEARING I N ACT OF 2004 , II. DECISION OF HONBLE SUPREME COURT IN THE CASE OF CI T VS MEGHALAYA STEELS LTD. III. COPY OF RELEVANT PART OF DIRECT TAX READY RECKONER. FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 22 OF 34 IV. COPY OF SHARE HOLDING PATTERN OF THE ASSESSEE CO (A PPELLANT). V. ORAL SUBMISSIONS - WERE MADE GIVING REASONS OF BONA FIDE BELIEF FOR CLAIMING THE DEDUCTION U/S 80IB AND THE REASON FOR SUO MOTU WITHDRAWAL OF DEDUCTION U/S 80IB, WHICH WAS OTHERWISE LEGALLY ALL OWABLE TO THE APPELLANT. 5. THAT THE NON CONSIDERATION OF THE DOCUMENTS AND DECISIONS ENCLOSED WITH THE PAPER BOOK DATED 08.07.2016 FILED BEFORE THE HO NBLE ITAT, AS WELL AS THE ORAL SUBMISSIONS MADE BEFORE THE HONBLE ITAT HAS CAUSED PREJUDICE THE APPELLANT AND IS THEREFORE A CASE FOR RECTIFICATION OF THE ORDER DATED 11.08.2016 UNDER SECTION 254(2) OF THE INCOME TAX ACT BY THE HONBLE ITAT IN TERMS OF THE DECISIONS RENDERED IN THE FOLLOWING CASES, ON WHICH THE APPELLANT RELI ES:- I. HONDA SIEL POWER PRODUCTS LTD. VS CIT [2207] 165 TA XMAN 307 (SC) REFERENCE TO PARA 12 & 13. II. LACHMAN DASS BHATIA HINGWALA P. LTD. VS ACIT 196 TA XMAN 563 DELHI HIGH COURT - DECISION OF THREE JUDGES BENCH , REFERENCE FROM PARA 26 TO 29. III. CHAMPA LAI CHOPRA V STATE OF RAJASTHAN [2003] 131 TAXMAN 417 (RAJ.) EFERENCE TO PARA 6. IV. ACIT RAJKOT V SAURASHTRA KUCCH STOCK EXCHANGE LTD. [2008] 173 TAXMAN 322 (SC) REFERENCE FROM PARA 24 TO 37. HONDA SEIL POWER - HONBLE SUPREME COURT (PARA 13) IN THE PRESENT CASE TRIBUNAL WAS JUSTIFIED IN EXERC ISING ITS POWERS UNDER SECTION 254(2) WHEN IT WAS POINTED OUT TO THE TRIBU NAL THAT THE JUDGEMENT OF THE CO-ORDINATED BENCH WAS PLACED BEFORE THE TRIBUN AL WHEN THE ORIGINAL ORDER CAME TO BE PASSED BUT IT HAD COMMITTED A MIST AKE IN NOT CONSIDERING THE MATERIAL, WHICH WAS ALREADY ON RECORD. THE TRIB UNAL HAS ACKNOWLEDGED ITS MISTAKE; IT HAS ACCORDINGLY RECTIFIED ITS ORDER. LACHMAN DASS BHATIA IS DELHI HC THREE JUDGES BENCH ORDER- PARA 26 THEIR LORDSHIPS FURTHER TOOK NOTE OF THE FACT THAT THE TRIBUNAL COMMITTED A MISTAKE IN NOT CONSIDERING THE MATERIAL WHICH WAS A LREADY ON RECORD AND THE TRIBUNAL ACKNOWLEDGED ITS MISTAKE AND ACCORDINGLY R ECTIFIED ITS ORDER. IT IS FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 23 OF 34 WORTH NOTING THAT THEIR LORDSHIPS HAVE CLEARLY STAT ED THAT THEY ARE NOT GOING BY THE DOCTRINE OR CONCEPT OF INHERENT POWER BUT ON THE BASIS THAT IF PREJUDICE HAS RESULTED TO THE PARTY, WHICH IS ATTRIBUTABLE TO THE TRIBUNAL'S MISTAKE, ERROR OR OMISSION AND WHICH ERROR IS A MANIFEST ERROR, TH EN THE TRIBUNAL WOULD BE JUSTIFIED IN RECTIFYING ITS MISTAKE, WHICH HAD BEEN DONE IN THE SAID CASE BY RECALLING THE ORIGINAL ORDER. APPLYING THE PRINCIPL ES WHICH WE HAVE ENUMERATED HEREINABOVE TO UNDERSTAND THE CONCEPT OF PRECEDENT, IT CAN SAFELY BE STATED THAT THE APEX COURT WAS DEALING WITH A CASE WHICH TRAVELLED FROM THIS COURT WHEREIN IT HAD BEEN HELD THAT THE T RIBUNAL HAD NO POWER OF RECALL OF ITS OWN ORDER IN ENTIRETY; THAT THE COURT WAS NOT GOING BY THE DOCTRINE OR CONCEPT OF INHERENT POWER THAT THE 'RUL E OF PRECEDENT' WHICH IS AN IMPORTANT PART OF LEGAL CERTAINTY IN RULE OF LAW IS NOT OBLITERATED BY SECTION 254(2) OF THE ACT; THAT IF PREJUDICE HAS RESULTED T O THE PARTY DUE TO THE MISTAKE, ERROR OR OMISSION WHICH IS ATTRIBUTABLE TO THE TRIBUNAL AND IT IS MANIFEST FROM THE RECORD, THE MISTAKE CAN BE RECTIF IED. THUS UNDERSTOOD, IT IS CLEAR AS CRYSTAL THAT THEIR LORDSHIPS HAVE HELD THAT THE FUNDAMENTAL PRINCIPLE IS THAT NO PARTY APPEARING BE FORE THE TRIBUNAL SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED BY THE T RIBUNAL AND NO PREJUDICE IS CAUSED TO EITHER OF THE PARTIES BEFORE THE TRIBU NAL WHICH IS ATTRIBUTABLE TO THE TRIBUNAL'S MISTAKE, OMISSION OR COMMISSION AND IF THE SAME ERROR IS A MANIFEST ERROR, THEN THE TRIBUNAL WOULD BE JUSTIFIE D TO RECALL. IN CHAMPALAL CASE - PARA 6 HOWEVER, IN A GIVEN CASE WHERE THE FACTUAL MISTAKE IS SO APPARENT THAT IT BECOMES NECESSARY TO CORRECT THE SAME, THE TRIBUNAL WOULD BE JUSTIFIED IN NOT ONLY CORRECTING THE SAID MISTAKE BY WAY OF RECTIFIC ATION BUT IF THE JUDGEMENT HAS PROCEEDED ON THE BASIS OF THAT FACT, IT WOULD B E JUSTIFIED IN RECALLING SUCH ORDER AND POSTING FOR HEARING. THUS TRIBUNAL IN CERTAIN CIRCUMSTANCES CAN RECALL I TS OWN ORDER. AND SECTION 254(2) OF THE ACT DOES NOT PROHIBIT SO. (B.4) AFFIDAVIT DATED 21-12-2017 OF MS. VANDNA GOPAL SHA RDA F.C.A., WHO IS A PARTNER OF M/S G.C. SHARDA & CO. WAS ALSO FILED DURING PROCEED INGS UNDER SECTION 254(2) OF I.T. ACT IN RESPECT OF THESE TWO MAS. RELEVANT PORTION OF T HE AFFIDAVIT IS REPRODUCED AS UNDER: FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 24 OF 34 1. THAT I AS AN AUTHORIZED REPRESENTATIVE HAD REP RESENTED AND FILED WRITTEN SUBMISSIONS AND ARGUED IN THE MATTER OF M/S. NICOTRA INDIA PVT. LTD. HAVING PAN- AABCN6199B BEFORE THE HONBLE INCOME TAX APPELLATE TRIBUNAL, E- BENCH, NEW DELHI IN APPEAL NO. 3953/DEL/2013 RELATED TO ASSESSMENT YEAR 2005-06. 2. THAT IN THE ABOVE SAID APPEAL FILED BEFORE THE H ONBLE TRIBUNAL THE UNDERSIGNED HAD FILED 3 COPIES OF PAPER-BOOK-SYNOPSIS ON 08.07.2016, TWO CO PIES OF WHICH WERE FOR THE HONBLE MEMBERS OF THE ITAT AND 1 COPY OF WHICH WAS FOR INC OME TAX DEPARTMENT. THAT A COPY OF THE RECEIPT ISSUED BY THE HONBLE ITAT IN THIS REGA RD IS ENCLOSED WITH THIS AFFIDAVIT. 3. THAT THE AFORESAID APPEAL IN CASE OF NICOTRA IND IA PVT. LTD. WAS HEARD BY THE HONBLE ITAT ON 25.07.2016. 4. THAT THE HONBLE ITAT HAS VIDE ITS ORDER DATED 1 1.08.2016 IN ITA NO. 3953/DEL/2013 FOR A.Y. 2005-06 HAS CONFIRMED THE LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 ON THE GROUND THAT AT NO STAGE EITHER BEFORE THE LOWER AUTHORITIES OR BEFORE THE ITAT, THE ASSESSEE HAS OFFERED ANY EXPLANATION OR INFORMATION / PARTICULARS ABOUT THE ELIGIBILITY CRITERIA ON THE BASIS OF WHICH THE DEDUCTION UNDER SECTION 8 0-IB WAS CLAIMED BY THE ASSESSEE, IN THE ORIGINAL RETURN OF INCOME. 5. THAT THERE HAS BEEN A MISTAKE APPARENT FROM RECO RD AS THE HONBLE ITAT HAS INADVERTENTLY MISSED OUT TO CONSIDER THE ABOVE SAID PAPER BOOK DA TED 08.07.2016 DETAILING/ EXPLAINING THE REASONS FOR MAKING THE INITIAL CLAIM OF DEDUCTION U /S 80-IB AS ALSO THE CONFLICTING VIEW WHICH WAS THE REASON DETER FOR SUO-MOTO WITHDRAWAL OF TH E CLAIM OF DEDUCTION AS WELL AS THE EXTENSIVE ORAL SUBMISSIONS MADE BY THE UNDERSIGNED BEFORE THE HONBLE ITAT. 6. THAT IT IS THEREFORE SUBMITTED BEFORE THE HONBL E TRIBUNAL THAT THE MISTAKE APPARENT ON RECORD, AS SUBMITTED IN PRECEDING PARAS MAY KINDLY BE CONSIDERED FOR RECTIFICATION AND CONSEQUENTIAL RE-CALL / RECONSIDERATION OF THE ABOV E SAID ORDER OF THE HONBLE TRIBUNAL IN ITA NOS. 3953/DEL/2013, AS DEEMED FIT. THAT I HAVE GIVEN THIS AFFIDAVIT OF MY OWN FREE WIT H WITHOUT ANY FORCE, COERCION OR UNDUE INFLUENCE OF ANY TYPE WHATSOEVER. (C) AT THE TIME OF HEARING BEFORE US, IN HER ORAL SUBMI SSIONS, THE LD. AUTHORIZED REPRESENTATIVE (AR, FOR SHORT) FOR ASSESSEE RELIE D ON THE CONTENTS OF THE AFORESAID TWO FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 25 OF 34 MAS, ON THE WRITTEN SUBMISSIONS AND THE AFORESAID A FFIDAVIT. SHE FURTHER SUBMITTED THAT REPRESENTATION BY HER BEFORE THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) [LD. CIT(A), FOR SHORT] WAS AFFECTED BECAUSE OF MEDICAL REASONS AND SHE FILED COPY OF LETTER DATED 21.02.2013 ADDRESSED TO THE LD. CIT(A) IN THI S REGARD. SHE ALSO CONTENDED THAT THE FACTS FOR ASSESSMENT YEAR 2006-07 WERE SOMEWHAT DIFFERENT FROM ASSESSMENT YEAR 2005-06 IN THE SENSE THAT WHILE WITHDRAWAL OF CLAIM UNDER SECTION 80IB OF I.T. ACT WAS MADE BY THE ASSESSEE FOR ASSESSMENT YEARS 2005-06 A ND 2006-07 THROUGH REVISED RETURNS; THE REVISED RETURN FOR ASSESSMENT YEAR 20 05-06 WAS BEYOND THE TIME PERMISSIBLE UNDER SECTION 139(5) OF I.T. ACT WHEREA S FOR ASSESSMENT YEAR 2006-07, THE REVISED RETURN WAS FILED WITHIN THE TIME PERMISSIBL E UNDER SECTION 139(5) OF I.T. ACT. THIS, ACCORDING TO THE LD. AR, MERITED LENIENT VIEW FOR ASSESSMENT YEAR 2006-07 AS COMPARED TO ASSESSMENT YEAR 2005-06. SHE ALSO CONTE NDED THAT THE PAPER BOOK DATED 08.07.2016 CONSISTING OF 21 PAGES FILED ON 08.07.20 16 WAS NOT CONSIDERED BY THE BENCH AND FURTHER THAT THE CONTENTS OF PAPER BOOK WERE SU CH, THAT DUE CONSIDERATION OF THE CONTENTS OF THE PAPER BOOK WOULD LEAD TO A VIEW FAV OURABLE TO THE ASSESSEE. SHE PRODUCED COPY OF ACKNOWLEDGMENT IN SUPPORT OF THE C LAIM THAT THE PAPER BOOK HAD BEEN FILED IN ITAT ON 08.07.2016. SHE CONTENDED THA T THE ASSESSEE HAD AN ARGUABLE CASE ON MERITS. SHE REQUESTED FOR RECALL OF THE AFO RESAID CONSOLIDATED ORDER DATED 11.08.2016 OF ITAT IN ITA NOS. 3953 & 3954/DEL/2013 , FOR ASSESSMENT YEARS: 2005-06 & 2006-07. IN RESPONSE TO A SPECIFIC QUERY FROM T HE BENCH REGARDING THE DATE OF FILING OF THE TWO MAS, THE LD. AR OF THE ASSESSEE SUBMITTE D THAT THE MAS WERE FILED WITHIN FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 26 OF 34 TIME AVAILABLE UNDER SECTION 254(2) OF I.T. ACT. T HE LD. DEPARTMENTAL REPRESENTATIVE (DR, FOR SHORT) SUBMITTED THAT THE CONTENTS OF TH E AFORESAID PAPER BOOK DATED 08.07.2016 WOULD MAKE NO DIFFERENCE TO THE OUTCOME OF THE ASSESSEES APPEAL IN ITAT. IN THIS REGARD, SHE SUBMITTED THAT THE CRUCIAL FACT WHICH GOES AGAINST THE ASSESSEE IS, THAT THE WITHDRAWAL OF CLAIM UNDER SECTION 80IA OF I.T. ACT WAS MADE NOT BY THE ASSESSEE VOLUNTARILY, BUT ONLY AFTER QUESTIONNAIRE DATED 04.07.2007 WAS ISSUED BY THE ASSESSING OFFICER (AO, FOR SHORT) FOR AY 2005-06. THIS CRUCIAL FACT WILL NOT ALTER, EITHER FOR ASSESSMENT YEAR 2005-06 OR ASSESSMENT YEAR 2006 -07, SHE SUBMITTED, EVEN IF THE CONTENTS OF THE AFORESAID PAPER BOOK DATED 08.07.20 16 ARE CONSIDERED. (D) WE HAVE HEARD BOTH SIDES CAREFULLY. WE HAVE ALSO P ERUSED THE MATERIALS ON RECORD. AS FAR AS PAPER BOOK DATED 08.07.2016 IS C ONCERNED, WE FIND THAT IN PARAGRAPH 3 OF OUR AFORESAID ORDER DATED 11.08.2016, WE HAD A LREADY RECORDED SPECIFICALLY, THAT WE HAD PERUSED THE MATERIALS ON RECORD. [RELEVANT PORTION OF OUR AFORESAID ORDER DATED 11.08.2016 HAS ALREADY BEEN REPRODUCED IN FOREGOING PARAGRAPH (A.1) OF THIS ORDER.] THEREFORE, THE CONTENTION MADE IN THE MAS, AND IN T HE ORAL SUBMISSIONS BEFORE US, THAT THE ITAT HAD NOT CONSIDERED THE PAPER BOOK, IS CONT RARY TO RECORD. SIMPLY BECAUSE SPECIFIC MENTION HAS NOT BEEN MADE IN OUR AFORESAID ORDER DATED 11.08.2016 REGARDING PAPER BOOK DATED 08.07.2016, IT DOES NOT MEAN THAT THE PAPER BOOK DID NOT RECEIVE OUR FULL CONSIDERATION. THUS, THERE IS NO MISTAKE APPA RENT FROM RECORD AS FAR AS THIS CONTENTION OF THE ASSESSEE IS CONCERNED. FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 27 OF 34 (D.1) IN THE MAS, IT HAS BEEN CONTENDED BY THE ASSESSEE THAT THE LD. AR OF THE ASSESSEE HAD MADE ORAL SUBMISSIONS BEFORE THE BENCH EXPLAINING REASONS FOR INITIAL CLAIM OF DEDUCTION UNDER SECTION 80IB OF I.T. ACT, AS ALSO SUBSEQUENT SUO-MOTO WITHDRAWAL BY WAY OF REVISED RETURNS, BOTH FOR ASSE SSMENT YEARS 2005-06 AND 2006-07. HOWEVER, ON PERUSAL OF OUR AFORESAID ORDER DATED 11 .08.2016, WE FIND THAT, WE HAD IN PARAGRAPH 3.1 SPECIFICALLY RECORDED: . FURTHER WE HAVE ALSO NOTICED THAT AT NO STAGE, EITHER BEFORE THE LOWER AUTHORITIES OR BEFORE US TH E ASSESSEE OFFERED ANY EXPLANATION OR INFORMATION / PARTICULARS ABOUT THE ELIGIBILITY CRI TERIA ON THE BASIS OF WHICH THE DEDUCTION WAS CLAIMED IN THE ORIGINAL RETURN FILED BY THE ASS ESSEE. SIMILARLY THOUGH THE ASSESEE CLAIMED THAT IT CAME TO THE KNOWLEDGE OF ASSESSEE A T THE TIME OF FILING RETURN FOR ASSTT YEAR 2007-08 THAT DEDUCTION U/S 80IB WAS NOT AVAILA BLE TO THE ASSESSEE ; THE ASSESSEE HAS ALSO NOT PROVIDED ANY EXPLANATION OR INFORMATIO N / PARTICULARS AS TO ON WHAT BASIS IT REALISED AT THE TIME OF FILING INCOME TAX RETURN FO R ASSTT. YEAR 2007-08 THAT DEDUCTION U/S 80IB OF I.T. ACT WAS NOT AVAILABLE TO THE ASSES SEE. THE ASSESEE SUBMITTED THAT CLAIM WAS EARLIER MADE AND LATER WITHDRAWN ON ACCOUNT OF DIFFERENCE OF OPINION. . THEREFORE, THE CONTENTION OF THE ASSESSEE THAT THE LD. AR OF THE ASSESSEE HAD MADE ORAL SUBMISSIONS BEFORE THE BENCH EXPLAINING REASON S FOR INITIAL CLAIM OF DEDUCTION UNDER SECTION 80IB OF I.T. ACT HAS ALSO SUBSEQUENT SUO-MOTO WITHDRAWAL BY WAY OF REVISED RETURNS, BOTH FOR ASSESSMENT YEARS 2005-06 AND 2006-07; IS CONTRARY TO RECORD. THUS, THERE IS NO MISTAKE APPARENT FROM RECORD ON T HIS COUNT ALSO. FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 28 OF 34 (D.2) WE HAVE ONCE AGAIN PERUSED THE CONTENTS OF THE AFO RESAID PAPER BOOK DATED 08.07.2016. WE ARE OF THE CONSIDERED VIEW THAT OUR DECISION, VIDE AFORESAID ORDER DATED 11.08.2016, TO CONFIRM THE PENALTY LEVIED UND ER SECTION 271(1)(C) OF I.T. ACT FOR ASSESSMENT YEARS 2005-06 AND 2006-07 WILL STAND, EV EN AFTER RECONSIDERATION OF THE CONTENTS OF THE PAPER BOOK. THE FACT REMAINS THAT T HE ASSESSEE DID NOT WITHDRAW THE CLAIM UNDER SECTION 80IB OF I.T. ACT EITHER FOR 200 5-06 OR FOR 2006-07, EVEN AFTER, ASSESSEES CASE WAS SELECTED FOR SCRUTINY FOR ASSES SMENT YEAR 2005-06 BY ISSUE OF NOTICE UNDER SECTION 143(2) OF I.T. ACT. THE ASSES SEE WAITED TILL THE AO ISSUED QUESTIONNAIRE REQUIRING THE ASSESSEE TO JUSTIFY THE CLAIM UNDER SECTION 80IB OF I.T. ACT FOR ASSESSMENT YEAR 2005-06, BEFORE THE ASSESSEE WI THDREW THE CLAIM UNDER SECTION 80IB OF I.T. ACT FOR ASSESSMENT YEAR 2005-06 AS WEL L AS FOR ASSESSMENT YEAR 2006-07. UNDER THESE FACTS AND CIRCUMSTANCES, WE REITERATE O UR FINDINGS RECORDED IN PARAGRAPH 3.1 OF OUR AFORESAID ORDER DATED 11.08.2016: IT REASONABLY CAN ALSO BE CONCLUDED THAT THE ASSESSEE ALREADY KNEW AT THE TIME OF FILIN G ORIGINAL RETURNS OF INCOME FOR ASSTT. YEAR 2005-06 AND FOR ASSTT. YEAR 2006-07 THAT THE DEDUCTION U/S 80IB OF I.T. ACT WAS NOT AVAILABLE TO IT AND FURTHER THAT DESPITE THIS K NOWLEDGE, THE ASSESSEE MADE CLAIM U/S 80IB OF I.T. ACT, THOUGH IT WAS NOT ADMISSIBLE, WIT H THE MOTIVE TO AVAIL OF DEDUCTION U/S 80IB OF I.T. ACT IN CASE THE RETURNS FOR ASSTT. YE AR 2005-06 AND 2006-07 WERE NOT SELECTED FOR SCRUTINY . AS ALREADY HELD BY US IN PARAGRAPH 3.2.1 OF OUR AFORESAID ORDER DATED 11.08.2016, THE ASSESSEE IS CLEARLY HIT BY OR DER OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ZOOM COMMUNICATION PVT. LTD. 191 TA XMAN 179 (DELHI). FURTHER, IN FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 29 OF 34 PARAGRAPH 3.2.2 OF OUR AFORESAID ORDER DATED 11.08. 2016, WE HAVE CATEGORICALLY EXPRESSED THE VIEW: THE ASSESSEE CLAIMS THAT THE REALISATION THAT THE A SSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S 80IB OF I.T. ACT WAS ARRIVED AT THE TIME OF FILING RETURN FOR ASSTT. YEAR 2007-08 IMPLIEDLY CLAIMING THEREBY THAT THE ASSESSEE DECIDED TO WITHDRAW THE CLAIMS U/S 80IB OF I.T. ACT FOR ASSTT. YEAR 200 5-06 AND ASSTT. YEAR 2006-07 (BY FILING REVISED RETURNS OF INCOME) NOT BECAUSE OF THE QUEST IONNAIRE DATED 4.7.2007 ISSUED BY THE LD. AO) BUT BECAUSE SUBSEQUENTLY AT THE TIME OF FILING RETURN FOR ASSTT. YEAR 2007- 08 THE ASSESSEE ON ITS OWN REALISED THAT DEDUCTION U/S 80IB WAS NOT ADMISSIBLE. THIS IS A SELF-SERVING CLAIM WITHOUT ANY CREDIBLE PROOF. SELF-SERVING CLAIMS WITHOUT CREDIBLE PROOF DO NOT MERIT SERIOUS CONSIDERATION, AND IN TH E FACTS AND CIRCUMSTANCES OF THE CASES BEFORE US, IT DOES NOT ADVANCE THE CAUSE OF T HE ASSESSEE. HAD THE REVISED RETURNS BEEN FILED (WITHDRAWING CLAIM MADE U/S 80IB OF I.T. ACT FOR ASSTT. YEAR 2005-06 AND 2006-07) WELL BEFORE THE TIME OF FILING RETURN FOR ASSTT. YEAR 2007-08 I.E. WELL BEFORE 31.10.2007, BUT AFTER QUESTIONNAIRE DATED 4.7.2007 WAS ISSUED BY LD. AO, WOULD THE ASSESSEE BE JUSTIFIED IN CLAIMING A FAVOURABLE CONS IDERATION ? NO. IN VIEW OF THE REASONING EARLIER GIVEN IN THIS ORDER, THE ASSESSEE WOULD STILL BE HIT BY EXPLANATION 1(B) TO S. 271(1)(C) OF I.T. ACT AND WOULD BE STILL LIAB LE TO PAY PENALTY U/S 271(1)(C) OF I.T. ACT. MERELY BECAUSE THE ASSESSEE DELAYED THE FILING OF REVISED RETURN OF INCOME (FOR ASSTT. YEAR 2005-06 AND 2006-07) TILL 31.10.2007, I .E. TILL THE TIME OF FILING OF RETURN FOR ASSTT. YEAR 2007-08 EVEN AFTER RECEIVING QUESTIONNA IRE DATED 4.7.2007 ; THE ASSESEE CANNOT CLAIM FAVOURABLE CONSIDERATION. ONES OWN MI STAKE OR DELAY CANT BE USED TO FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 30 OF 34 ADVANCE ONES CAUSE. IN LAW, NOBODY CAN CLAIM THE B ENEFIT OF DELAYS OR MISTAKES ON HIS OWN PART; THOUGH IT MAY ADVANCE THE CAUSE OF THE OT HER SIDE. RELEVANT PORTION OF OUR AFORESAID ORDER DATED 11.08.2016 HAS ALREADY BEEN R EPRODUCED IN PARAGRAPH 3.2 OF OUR AFORESAID ORDER DATED 11.08.2016. THUS, CONSIDERING THE UNAMBIGUOUS VIEWS EXPRESSED BY US IN OUR AFORESAID ORDER DATED 11.08.2016, THER E IS NO MISTAKE APPARENT FROM RECORD EVEN ON THIS COUNT, WITHIN THE MEANING OF SE CTION 254(2) OF I.T. ACT. WE REITERATE THAT OUR DECISION, VIDE AFORESAID ORDER D ATED 11.08.2016, TO CONFIRM THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF I.T. ACT FOR ASSESSMENT YEARS 2005-06 AND 2006-07 WILL STAND, EVEN AFTER RECONSIDERATION OF T HE CONTENTS OF THE PAPER BOOK. (D.3) ASSUMING, FOR THE SAKE OF DISCUSSION, THAT THE ASS ESSEE HAS AN ARGUABLE CASE ON MERITS, AS CONTENDED BY THE ASSESSEE; WE CANNOT BE PERSUADED TO REVIEW OUR DECISION IN OUR AFORESAID ORDER DATED 11.08.2016 DISMISSING ASSESSEES APPEAL. IT IS SETTLED LAW THAT REVIEW OF AN ORDER OF ITAT IS NOT PERMITTED IN PROCEEDINGS UNDER SECTION 254(2) OF I.T. ACT. WHEN A PARTY CLAIMS, CONTRARY TO A REASONED ORDER O F THE ITAT ON MERITS, TO HAVE AN ARGUABLE CASE ON MERITS, OR EVEN A GOOD CASE ON MERITS; EVEN THEN, A REVIEW OF THE EARLIER ORDER OF ITAT IS BEYOND THE SCOPE OF SECTION 254(2) OF I.T. ACT, IF THERE IS NO MISTAKE APPARENT FROM THE RECORD IN THE EARLIER ORDER. WHAT IS PERMITTED UNDER SECTION 254(2) OF I.T. ACT IS RECTIFICATION OF MISTAKE APPARENT FROM THE RECORD; AND NOT A REVIEW . AS WE HAVE ALREADY SEEN, THERE IS NO MISTAKE APPARENT FRO M RECORD. FURTHER, IN THE CASE OF CIT V SRI PONKUMAR MAGNESITE MINES LORRY TRANSPORT OPERATOR PERIYAGOLLAPATTI [2016] FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 31 OF 34 236 TAXMAN 410 (MAD.), IT WAS HELD THAT THE TRIBUNA L HAS POWER UNDER SECTION 254(2) WHEN THERE IS AN ERROR APPARENT ON FACT OF RECORD, HOWEVER, IN GUISE OF RECTIFYING MISTAKE, IT CANNOT REVERSE ITS OWN ORDER. FUTHERMO RE, IN THE CASE OF VATIKA LTD. V. DCIT [2016] 68 TAXMANN.COM 87/ 50 ITR (TRIB.) 90 (DELHI) , IT WAS HELD THAT WHERE ASSESSEE FILED MISCELLANEOUS APPLICATION SEEKING RECALL OF A N ORDER BUT FAILED TO POINT OUT ANY ERROR APPARENT ON FACT OF RECORD AND BY FILING APPL ICATION ASSESSEE WAS IN FACT SEEKING REVIEW OF ORDER, APPLICATION SO FILED WAS TO BE DIS MISSED. MOREOVER, IN THE CASE OF TRIAD RESORTS & HOTELS (P.) LTD. V. WTO [2016] 73 TAXMANN .COM 245 / 160 ITD 668 (BANG.), IT WAS HELD THAT SECTION 254(2) IS NOT A CARTE BLAN CHE FOR TRIBUNAL TO CHANGE ITS OWN VIEW BY SUBSTITUTING A VIEW WHICH IT BELIEVES SHOUL D HAVE BEEN TAKEN IN FIRST INSTANCE. ALSO, IN THE CASE OF GOWTHAMI ASSOCIATES V. ITO [20 18] 89 TAXMANN.COM 192 / 168 ITD 509 (BANG. TRIB.), IT WAS HELD THAT WHERE MISCELL ANEOUS PETITION FILED BY ASSESSEE WAS SEEKING A REVIEW OF EARLIER ORDER OF TRIBUNAL BY RE CONSIDERING APPLICATION OF PRINCIPLES LAID DOWN BY SUPERIOR COURTS TO FACTS OF CASE OR BY RECONSIDERING ITS FINDINGS RECORDED, OR BY RECONSIDERING APPLICATION OF RELEVANT PROVISI ONS OF LAW TO FACTS OF CASE, SUCH A COURSE BEING NOT PERMISSIBLE UNDER SECTION 254(2), PETITION FILED BY ASSESSEE WAS TO BE DISMISSED. THE CASE OF HONDA SIEL POWER PRODUCT LT D. V. CIT [2007] 165 TAXMAN 307 (SC) ON WHICH THE ASSESSEE HAS PLACED RELIANCE DOES NOT ADVANCE THE CASE OF THE ASSESSEE BECAUSE OF CLEARLY DISTINGUISHABLE FACTS A ND CIRCUMSTANCES. IN HONDA SIEL POWER PRODUCT LTD. (SUPRA) THE ITAT HAD PASSED ORDE R UNDER SECTION 254(2) OF I.T. ACT, BECAUSE IN THE ORIGINAL APPELLATE ORDER OF ITAT, A BINDING PRECEDENT IN FAVOUR OF FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 32 OF 34 ASSESSEE WAS NOT CONSIDERED. HOWEVER, IN THE CASE BEFORE US, A BINDING PRECEDENT IN THE CASE OF CIT V. ZOOM COMMUNICATION PVT. LTD. 191 TAXMAN 179 (DELHI), WHICH IS AN ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT, IS AGAINST THE ASSESSEE. FURTHER, THE DECISION IN THE CASE OF LACHMAN DASS BHATIA HINGWAL A (P.) LTD. V. ACIT [2011] 196 TAXMAN 563 (DELHI) (FB) ON WHICH THE ASSESSEE HAS P LACED RELIANCE ALSO DOES NOT ADVANCE THE CASE OF THE ASSESSEE BECAUSE OF CLEARLY DISTINGUISHABLE FACTS. IN LACHMAN DASS BHATIA HINGWALA (P.) LTD (SUPRA), THE HONBLE HIGH COURT HELD THAT TRIBUNAL CAN RECALL HIS ORDER IN ENTIRETY IF IT IS SATISFIED THA T PREJUDICE HAS RESULTED TO PARTY WHICH IS ATTRIBUTABLE TO TRIBUNALS MISTAKE, ERROR OR OMISSI ON AND WHICH ERROR IS A MANIFEST ERROR. HOWEVER, IN THE CASE BEFORE US, AS WE HAVE ALREADY SEEN, THERE IS NO MISTAKE APPARENT FROM RECORD. FURTHER, THE CASE OF CHAMPA LAL CHOPRA V. STATE OF RAJASTHAN [2003] 131 TAXMAN 417 (RAJ.), ON WHICH THE ASSESSEE HAS PLACED RELIANCE ALSO DOES NOT ADVANCE THE CASE OF THE ASSESSEE BECAUSE OF CLEARLY DISTING UISHABLE FACTS. IN THE CASE OF CHAMPA LAL CHOPRA (SUPRA), TRIBUNAL GRANTED RECTIFI CATION AND POSTED THE CASE OF REHEARING HAVING ADMITTED THAT ITS ORDER HAD PROCEE DED ON THE ASSUMPTION OF WRONG FACTS. HOWEVER, IN THE CASE BEFORE US, AS WE HAVE ALREADY SEEN, THERE IS NO MISTAKE APPARENT FROM RECORD. LASTLY, THE CASE OF ACIT RAJ KOT V SAURASHTRA KUCCH STOCK EXCHANGE LTD. [2008] 173 TAXMAN 322 (SC), ON WHICH T HE ASSESSEE HAS PLACED RELIANCE ALSO DOES NOT ADVANCE THE CASE OF THE ASSESSEE BECA USE OF CLEARLY DISTINGUISHABLE FACTS. IN THE CASE OF ACIT RAJKOT V SAURASHTRA KUCCH STOCK EXCHANGE LTD (SUPRA), THE TRIBUNAL ALLOWED THE APPLICATION FOR RECTIFICATION ON THE GR OUND THAT ORDER OF JURISDICTIONAL HIGH FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 33 OF 34 COURT IN FAVOUR OF THE ASSESSEE WAS NOT CONSIDERED BY TRIBUNAL IN THE ORIGINAL ORDER. HOWEVER, IN THE CASE BEFORE US, BINDING PRECEDENT I N THE CASE OF CIT V. ZOOM COMMUNICATION PVT. LTD. 191 TAXMAN 179 (DELHI), WHI CH IS AN ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT, IS AGAINST THE ASSESSEE. (E) WE HAVE ALREADY HELD THAT THERE IS NO MISTAKE APPA RENT FROM RECORD IN OUR AFORESAID ORDER DATED 11.08.2016. WE HAVE ALSO ALR EADY EXPRESSED THAT IT IS SETTLED LAW THAT REVIEW OF AN ORDER OF ITAT IS NOT PERMITTED IN PROCEEDINGS UNDER SECTION 254(2) OF I.T. ACT. WHAT IS PERMITTED UNDER SECTION 254(2) O F I.T. ACT IS RECTIFICATION OF MISTAKE APPARENT FROM THE RECORD; BUT THERE IS NO MISTAKE A PPARENT FROM RECORD IN OUR AFORESAID ORDER DATED 11.08.2016. THEREFORE, WE FIND NO MERI T IN THE TWO MAS FILED BY THE ASSESSEE, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, APPLICABLE LAW AND DECIDED PRECEDENTS DISCUSSED IN THIS ORDER. (F) IN VIEW OF THE FOREGOING, BOTH THE MAS FILED BY T HE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH DAY OF APRIL, 2019. SD/- SD/- (H.S. SIDHU) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 08.04.2019 POOJA/- FIT FOR PUBLICATION M.A. NOS. 109 & 110/DEL/2017 . SD/- (JM) SD/- (AM) M/S NICOTRA INDIA PVT. LTD. PAGE 34 OF 34 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION DIRECT ON COMPUTER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER