ACIT Vs. NUBERG ENGINEERING LTD.

JUDGEMENT

(1.) THIS appeal has been preferred by the revenue against the order of the CIT(A) -XVI, New Delhi dated 26.10.2012 in Appeal No. 16/11 -12 for AY 2008 -09. Although the revenue has raised as many as five grounds in this appeal but except ground No. 1, other grounds are argumentative and supportive to the main ground No. 1 which reads as under: - -

(2.) BRIEFLY stated, the facts giving rise to this appeal are that the assessee while filing the return of income claimed deduction u/s. 80IB of the Income Tax Act, 1961 amounting to Rs. 1,22,09,044/ -. Subsequently, during the assessment proceedings, assessee filed a letter on 8.9.2010 and withdrew the claim of deduction. During the assessment proceedings, the issue was discussed and the assessee's representative submitted that their claim was valid but they were not in possession of excise certificate indicating the date of commencement of business. However, in order to buy peace, the AR submitted before the AO that they had withdrawn the claim of deduction u/s. 80IB of the Act and agreed for addition in this regard. Accordingly, the said amount of claim was added back to the income of the assessee on agreed basis. Subsequently, the AO issued a notice for imposition of penalty u/s. 271(1)(c) of the Act on 12.1.2011 fixing the date on 17.1.2011. None appeared on the said date nor any reply was filed. The AO issued another show cause notice on 15.2.2011 fixing the date on 28.2.2011. The AO held that since the assessee has not filed any reply, it is therefore observed that the assessee has no explanation to offer and penalty is decided on the basis of material facts as per provisions of the Act. The AO imposed penalty of Rs. 41,49,854/ - @100% of tax sought to be evaded.

(3.) WE have heard arguments of both the sides and carefully perused the material and documents placed before us. Ld. DR submitted that the ld. CIT(A) has erred in deleting the penalty of Rs. 41,49,854/ - imposed u/s. 271(1)(c) of the I.T. Act, 1961 for furnishing of inaccurate particulars of income. Ld. DR further contended that the first appellate authority has erred in deleting the penalty by holding that the AO had not recorded its satisfaction regarding furnishing of inaccurate particulars of income whereas the AO initiated the penalty proceedings u/s. 271(1)(c) of the Act in the assessment order and the assessee accepted that he had furnished inaccurate particulars of income u/s. 80IB of the Act and agreed for addition of the same. Ld. DR vehemently contended that the CIT(A) ignored the reason recorded by the AO for imposing penalty that the CIT(A) was aware of the fact that commencement of business certificate of Excise department was not available with it, still it did not file its revised return as per time allowed u/s. 139(5) of the Act. The DR also mentioned that the CIT(A) has also ignored this important fact that the assessee accepted its mistake only after issuance of notice u/s. 143(2)/142(1) of the Act i.e. after initiation of assessment proceedings.