IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.675 of 2008 Date of decision: 16.12.2008 The Commissioner of Income Tax. -----Appellant Vs. M/s Lakhani India Limited. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N. MITTAL Present:- Mr. Yogesh Putney, Sr. Standing Counsel for the appellant. ----- ORDER: The revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order dated 28.12.2007 passed by Income Tax Appellate Tribunal, Delhi Bench ‘H’, New Delhi in I.T.A. No.1165/DEL/2007 for the assessment year 2000-01, proposing to raise following substantial questions of law:- “1. Whether on the facts and in the circumstances of the case, the Hon’ble ITAT was right in law in upholding the order of the Ld. CIT(A) who deleted the penalty of Rs.13,50,291/- imposed u/s 271(1)(C) of the Income Tax Act on account of excess deduction claimed by the assessee u/s 80 HHC by taking whole of the profit from export unit as eligible for deduction instead of I.T.A. No.675 of 2008 taking into account the ratio of export turnover to total turnover while computing the said deduction?” 2. Whether on the facts and in the circumstances of the case, the Hon’ble ITAT in deleting the penalty levied by Assessing Officer u/s 271(1)(c) in contravention of the order of the Hon’ble Madras High Court in the case of M. Sajjanraj Nahar Vs. CIT (293 ITR 230) and also in view of section 271(1B) of the Income Tax Act is correct, when the Assessing Officer had recorded initiation of penalty proceedings u/s 271(1)(c) in the assessment order?” 3. Whether the Hon’ble ITAT in deciding that proving contumacious intent is an essential ingredient in lelvy of penalty in contravention of the provisions of a Civil Statute like Income Tax Act inspite of three being so many judgements that breach of a civil obligation attracts levy of penalty whether the contravention was made by the defaulter with any guilty intention or not?” 4. Whether on the facts and in the circumstances of the case, the Hon’ble ITAT is right in law in relying upon the case law in CIT Vs. N. Krishnan 240 ITR 47, 107 Taxmann 283(Ker.), 153 CTR 450 when in the present case, the issue is that of book profits u/s 115JA, whereby income was assessed at a positive figure and assessed income was not loss?” 2 I.T.A. No.675 of 2008 The Assessing Officer did not accept computation of deductions claimed by the assessee under Section 80 HHC of the Act while adding back the amount wrongly claimed to be deduction, penalty was also imposed. On appeal, CIT(A) deleted the penalty on the ground that merely for raising a debatable issue, penalty could not be imposed, in absence of any concealment or misrepresentation by the assessee. The said finding has been affirmed by the Tribunal in following terms:- “....The Assessee during penalty proceedings claimed that there is no concealment and the addition/disallowances has been made on account of difference of opinion. This factual matrix was not controverted by the revenue. Now the question arises whether penalty can be imposed on account of difference of opinion. The obvious reply ‘no’ because the whole problem started due to the difference of opinion, therefore, it cannot be said that the assessee furnished inaccurate particulars of income or concealed its income which are the necessary ingredients for imposing penalty u/s section 271(1)(c) of the Act. The Ld. counsel for the assessee, during arguments contended that the matter was controversial till the decision of the Hon’ble Apex Court in Ipca Laboratories was delivered as at the relevant time the decision in the case of ACIT vs. Avon Cycles Ltd. (82 TTJ 127) (Chd) (ITAT) and Ipca Laboratories vs. Dy. CIT(251 ITR 401) (Bom) was in favour of the assessee. It was also pleaded that in the own case of the assessee for assessment year 1998-99, the impugned addition was deleted by the Ld CIT(A) vide order dated 12.9.2006. In the present appeal also the claim of the assessee was duly supported by certificate of Chartered Accountant. It is pertinent to mention here that the decision of the Bombay 3 I.T.A. No.675 of 2008 High Court in the case of Ipca Laboratories Ltd. (supra) was in favour of the assessee when the return was filed. However, this decision was later on reversed by the Hon’ble Apex Court. In view of these facts, it cannot be said that the assessee concealed its particulars of income.” We have heard learned counsel for the revenue. In view of finding concurrently recorded by the CIT(A) and the Tribunal that there was no concealment or misrepresentation by the assessee, we do not find any fault with the impugned order setting aside the levy of penalty. No substantial question of law arises. The appeal is dismissed. ( ADARSH KUMAR GOEL ) JUDGE December 16, 2008 ( L. N. MITTAL ) ashwani JUDGE 4