Penalty under Income Tax Act canceled by ITAT Bombay-F for tour operator's deduction claim withdrawal.

The ITAT Bombay-F canceled the penalty imposed under section 271(1)(c) of the Income Tax Act on a tour operator company for claiming a deduction under section 80HHD. The company withdrew the deduction claim before the assessment was finalized, disclosing all facts. The tribunal found no concealment or furnishing of inaccurate particulars, leading to the penalty being overturned and the appeal allowed.

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Issues involved: Appeal against imposition of penalty u/s 271(1)(c) of the Income Tax Act by the Assessing Officer.

Summary:
The appellant, a tour operator company, claimed deduction u/s 80HHD of the Act for the assessment year 1997-98. The company applied for approval from the prescribed authority before filing the return of income, but the approval was granted after the filing date. The company later withdrew the deduction claim during assessment proceedings. The Assessing Officer imposed a penalty for furnishing inaccurate particulars of income. The CIT(A) upheld the penalty, stating that the withdrawal was not voluntary and the claim was not bona fide. However, the ITAT Bombay-F held that there was no concealment of income or furnishing of inaccurate particulars. The appellant had disclosed all facts and withdrew the claim before the assessment was completed. The penalty was canceled, and the appeal was allowed.

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