CIT Vs. HIMACHAL AGRO FOODS LTD

JUDGEMENT

(1.) The revenue has filed the present appeal under Section 260A of the Income Tax Act, 1961 (for short the Act ) against the order of the Income Tax Appellant Tribunal, Chandigarh Bench B Chandigarh (hereinafter referred to as the Tribunal"), dated 30-7-2007 passed in ITA No. 245/Chandi/2007 for the assessment year 2003-04 raising the following substantial question of law:

(2.) The assessee company filed its return of income for the assessment year 2003-04 on 1-12-2003 declaring NIL income which was processed under Section 143(1)(a) of the Act on 11-3-2004. Thereafter, the case was selected for scrutiny. It was found that the assessee had claimed 100 per cent deduction under Section 80-IB of the Act in the original return, whereas the company was entitled to only 30 per cent deduction as per the said provisions. It was admitted by the assessee that the deduction under Section 80-IB of the Act was being claimed wrongly by mistake. Thereafter, the assessee revised the return on 24-3-2005 declaring income of Rs. 10,04,200 and claimed Rs. 4,30,371 as deduction under Section 80-IB and thereafter the assessment was completed. The assessing officer also initiated penalty proceedings under Section 274 read with Section 271(1)(c) against the assessee. Vide order dated 28-9-2006, the Income Tax Officer, Ward-1(2) Chandigarh imposed the penalty under Section 271(1)(c) for furnishing inaccurate and concealing particulars of income. The said order of penalty was challenged by the assessee by filing appeal before the Commissioner (Appeals), Chandigarh (hereinafter referred to as the Commissioner (Appeals)") on the ground that the mistake committed by the assessee was bona fide and therefore, the assessee cannot be penalized under the provisions of Section 271(1)(c) of the Act. The Commissioner (Appeals) vide his order dated 18-12-2006 accepted the appeal and deleted the penalty.

(3.) Aggrieved against the said order, the revenue filed the appeal before the Tribunal raising the plea that the assessee had deliberately concealed the particulars of income as the assessee had claimed wrong deduction and therefore, the penalty proceedings were rightly initiated against the assessee. However, the appeal of the revenue was dismissed by the Tribunal holding that no definite finding has been recorded by the assessing officer that there is a concealment of income by the assessee and it was merely a case of a wrong claim under mistaken belief as to for which five years the assessee was entitled to deduction under Section 80-IB of the Act and it was a debatable issue.