Tribunal Upholds CIT(A)'s Decision on Penalty Deletion for Section 35(2AB) Deduction

The Tribunal upheld the CIT(A)'s decision to delete the penalty imposed under section 271(1)(c) for deduction u/s. 35(2AB). The Tribunal found that the assessee's actions did not amount to concealing income or furnishing inaccurate particulars of income, as the assessee genuinely believed in obtaining approval for the deduction, which was granted subsequently. The Tribunal agreed with the CIT(A)'s reasoning based on the decision in CIT Vs. Reliance Petro Products Pvt. Ltd. (2010) 322 ITR 158 Delhi, affirming the dismissal of the Revenue's appeal.

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Issues:
1. Whether the penalty under section 271(1)(c) for deduction u/s. 35(2AB) was rightly deleted by the CIT(A)Rs.

Analysis:
The appeal was filed by the Revenue against the order of CIT(A) for the assessment year 2013-14 concerning the penalty of Rs. 58,97,366 levied under section 271(1)(c) for deduction u/s. 35(2AB). The assessee, engaged in biotechnology business, filed its return of income declaring a loss and book profits. The assessment was completed by the Assessing Officer, making various additions and disallowances. Penalty proceedings were initiated under section 271(1)(c) for furnishing inaccurate particulars of income. The Assessing Officer levied a penalty of Rs. 58,97,366, which was challenged by the assessee before the CIT(A).

The CIT(A) allowed the appeal of the assessee, holding that the assessee genuinely believed that approval would be granted by DSIR for deduction u/s. 35(2AB). The approval was granted after the claim was made, and the assessee withdrew the claim by filing a revised computation of income during the assessment proceedings. The CIT(A) found that this action did not amount to concealing income or furnishing inaccurate particulars of income. The assessee provided explanations to the Assessing Officer regarding the revised computation of income. The CIT(A) relied on the decision of the Hon'ble Apex Court in the case of CIT Vs. Reliance Petro Products Pvt. Ltd. (2010) 322 ITR 158 Delhi to support its findings. Consequently, the CIT(A) dismissed the appeal of the Revenue.

In conclusion, the Tribunal upheld the decision of the CIT(A) and dismissed the appeal of the Revenue. The Tribunal concurred with the CIT(A)'s findings that the assessee's actions did not constitute concealment of income or furnishing inaccurate particulars of income. The Tribunal's decision was based on the genuine belief of the assessee regarding the approval for the deduction u/s. 35(2AB) and the subsequent withdrawal of the claim upon receiving the approval from DSIR. The Tribunal found no grounds to interfere with the CIT(A)'s decision, thereby affirming the deletion of the penalty imposed under section 271(1)(c) by the Assessing Officer.

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