Rayban Sun Optics India Ltd.,, Bhiwani vs Assessee

This appeal by the assessee arises out of the order passed by the

CIT(A) on 18.07.2013 confirming the penalty imposed by the AO u/s

271(1)(c) of the Income-tax Act, 1961 (hereinafter also called 'the Act')

in relation to the assessment year 2004-05.

ITA No.5328/Del/2013

2. Briefly stated, the facts of the case are that the assessee claimed

deduction u/s 80HHC for a particular amount. The AO did not agree

with one of the aspects of the computation of such deduction. He,

therefore, reduced the amount of deduction u/s 80HHC. This led to the

imposition and confirmation of penalty u/s 271(1)(c).

3. After considering the rival submissions and perusing the relevant

material on record, we find it as an admitted position that the penalty

under consideration was imposed by the AO simply for the reason that

the computation of deduction u/s 80HHC made by the assessee did not

tally with such computation made by the AO. It goes without saying

that the amount of deduction is computed by the auditor of the company,

who is obliged to calculate the same in the prescribed form. But, for that,

it is crystal clear that the assessee claimed this deduction by disclosing

all the necessary facts in this regard. The Hon'ble Supreme Court in the

case of CIT vs. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158

(SC), has held that the mere making of a claim which is not sustainable

in law, by itself will not attract penalty. When the assessee furnishes all

2 ITA No.5328/Del/2013

the particulars in return which are not found to be inaccurate, it is only

up to the authorities to accept the claim of the assessee in the return or

not. In no case, this can call for imposition of any penalty. The

Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt.

Ltd. Vs. CIT (2012) 348 ITR 306 (SC) has held that no penalty u/s

271(1)(c) can be imposed for a bona fide mistake committed by the

assessee. When we consider the ratio of these two judgments in

juxtaposition to the factual position prevailing before us, the irresistible

conclusion which follows is that no penalty can be imposed in the

present circumstances simply for the reason that the computation made

by the assessee did not tally with that made by the AO. Overturning the

impugned order, we order for the deletion of penalty.

4. In the result, the appeal is allowed.

The order pronounced in the open court on 04.02.2015.

Sd/- Sd/-

[H.S. SIDHU] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated, 04th February, 2015.

3 ITA No.5328/Del/2013

dk

Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.

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