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04-04-2019, Oil Industry Development, Section 271(1)(c), 35, Tribunal Delhi

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1 week 2 days ago #9102 by amit
Section - 271(1)(c), 35, 36(1)(xii)
Order Date - 04-04-2019
Favouring - Assessee
Court - Tribunal Delhi
Appellant - Oil Industry Development Board
Respondent - DCIT
Justice - BHAVNESH SAINI JM & O.P. KANT AM
Citation - 419Taxpundit137
Appeal No. - ITA Nos.4662, 4663 & 4664/Del/2014
Asstt. Year - 2005-06, 2006-04 & 2007-08

Order

PER : O.P. KANT, A.M

These three appeals by the assessee are directed against common order dated 16/23.06.2014 passed by the Ld. Commissioner of Income-tax (Appeals)-XXVI, New Delhi [in short the Ld. CIT(A)] for assessment years 2005-06, 2006-07 and 2007- 08, in relation to penalty levied for furnishing of inaccurate particulars of the income under section 271(1)(c) of the Incometax Act, 1961 (in short ‘the Act’). As common issue of dispute is involved in all the three appeals, same were heard together and disposed off, by way of this consolidated order for convenience and avoid repetition of facts.

2. The grounds of appeal in ITA No.4662/Del/2014 for assessment year 2005-06 are reproduced as under:

1. That the Ld. CIT both on facts and in law had erred in passing the penalty order u/s 271(1)(c).

2. It is contended that the Appellant Board had neither concealed nor furnished any inaccurate particular so as to attract provisions of section 271(l)(c) of the IT Act. hence the impugned penalty order is wrong and bad in law.

3. It is contended that the claim of benefit of weighted deduction under section 35 being an incentive and having made to recognized institution under section 35 cannot come under the purview of provisions of section 271(l)(c), ince it is neither concealment nor furnishing of any inaccurate particulars.

4. It is contented that merely because assessee had claimed expenditure, which claim was not accepted or was not acceptable to revenue, that by itself would not attract penalty u/s 271(l)(c) held in the case of CIT vs. Reliance petro products (P.) Ltd. [Civil Appeal No. 2463 of 2010, dated 17.03.2010 (SC).

5. The expression 'concealment of income' implies that an income is being hidd n camouflaged or covered up so as it cannot be seen, found observed or discovered. The expression 'furnishing of inaccurate particulars of income' implies furnishing of details or information about income which are not in conformity with the facts or truth, it does not extend to subjective areas such as the taxability of income, admissibility of a deduction and interpretation of law. The claim of the benefit of the deduction under section 35 cannot be amount to an incorrect claim and will not tantamount to furnishing of inaccurate particulars.

6. That Ld. CIT(A) has completely overlooked the orders of Ld CIT(A) dt 23.04.2009 and ITAT 'E' Bench dt. 16.09.2009 pertaining to A.Y. 03- 04 in the appellants own case which allowed full relief from thisexorbitant penalty on disallowance made u/s 35 .Thus Ld. CIT(A) has erred in overriding the covered matter thus devoid of principles of natural justice.

It is pertinent to mention here that petition u/s 154 placing reliance on apex court judgment in the case of M/s Honda Siel Power Products Ltd. v. CIT (2007) 295 ITR 466, has already been moved on 14-07-2014 and its disposal by Ld. CIT(A) is awaited however to respect limitations in filling appeal , form 36 alongwith grounds of appeal have been completed and filed before your honours.

7. That with complete disregard to judicial pronouncements holding that penalty proceedings should be an independent fact finding , the Ld. CIT(A) has erred in imposing penalty because appellant had not preferred any appeal on disallowance of Rs 5,23,00,000.00 u/s 35 in the quantum case.

8. That the Ld. CIT(A) has erred in realizing that Ld. ACIT had summarily disallowed the claim u/s 35 of Rs. 5,23,00,000.00 considering the same as application of income as was for disallowance of Rs. 78,14,68,000.00 and accordingly initiated penalty in quantum order. Then by and expenses of OIDB were no more considered as application of income but allowable u/s 36(l)(xii) of the Income Tax Act, 1961 thus Ld. ACIT was duty bound to revise the reasoning in show cause before holding the appellant guilty under explanation (1) of 271 (l)(c) and which he has failed to do and Ld CIT(A) perpetuated the fault by upholding the penalty order because what is important is the mind set of Ld. ACIT at the time of completing quantum assessment and if it required a revisit of very reasoning in initiation u/s 271(l)(c) by issue of revised show cause, it should have been done hence a technical lapse.

9. That appellant craves to alter, amend, modify, add or delete any of the grounds of appeal at the time of hearing.

2.1 The Grounds of appeal raised in ITA No. 4663/Del/2014 for assessment year 2006-07 are reproduced as under:

1. That the Ld. CIT both on facts and in law had erred in passing the penalty order u/s 271(l)(c).

2. It is contended that the Appellant Board had neither concealed nor furnished any inaccurate particular so as to attract provisions of section 271(1 )(c) of the IT Act. hence the impugned penalty order is wrong and bad in law.

3. It is contended that the claim of benefit of weighted deduction under section 35 being an incentive and having made to recognized institution under section 35 cannot come under the purview of provisions of section 271(l)(c), since it is neither concealment nor furnishing of any inaccurate particulars.

4. It is contented that merely because assessee had claimed expenditure, which claim was not accepted or was not acceptable to

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