TaxTMI 
TaxTMI 
TaxTMI 
2013 (7) TMI 251
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....appeals involve common issues, except variation in figures, which are arising out of identical set of facts and circumstances, therefore, as a matter of convenience, these appeals were heard together and are being disposed off by way of this consolidated order. However, in order to understand the implication, it would be necessary to take note of the facts of one appeal. Accordingly, we proceed to adjudicate the appeal in ITA no. 325/Mum./2011, for the assessment year 2008-09. 2. The relevant facts are that the claim for deduction under section 80IA was disallowed by the Assessing Officer on the ground that the assessee which was awarded a contract for construction of four lane road was acting merely as a contractor, therefore, the deducti....
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....of infrastructure as a contractor. It is also a fact that the appellant company has been making claims for deduction u/s 80 IA of the I T act for the last several years, on the ground that the business activities undertaken entitle it to such a deduction. The important points to be considered whether or not there existed any reasonable basis for such a claim, how much ever contentious it may be. It is seen from the facts of the case that the nature of the claim is debatable as examined in the Honorable ITAT decisions such as M/s. Om Metal Infraprojects Ltd. vs. CIT and B.T. Patil & Sons Constructions, Further the retrospective amendments made to the subsection 4 of the section 80 IA income tax act, also indicate that there was a need for su....
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....sment years." 3. The learned Counsel, representing the assessee, at the outset, submitted before us that similar issue of penalty under section 271(1)(c) has been decided by the Tribunal in assessee's group case viz. DCIT v/s Unity Chopra (Joint Venture), in ITAs no. 320 to 324/Mum./2011, vide order dated 3rd April 2013, wherein the Tribunal has deleted the penalty levied on similar set of facts. 4. The learned Departmental Representative, on the other hand, conceded that the issue involved in the present appeals as well as in the appeal decided by the Tribunal cited supra are identical. 5. We have carefully considered the findings of the Commissioner (Appeals) as well as the penalty order passed by the Assessing Officer and the decision....
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....ated 8.6.2011. In fact on strength of above decision claim of appellant, even on merit (in quantum proceedings) is valid and sustainable. b) In the present case, the AO has levied penalty us 271(1)(c) of the Act. In this regard, it is humbly submitted that the assessee company was under a bonafide belief that it is eligible for deduction u/s 80-IA of the Act. Moreover, from the decisions cited above, it is clearly evident that the said issue is a highly debatable one. It is well settled law that no penalty u/s 271(1)(c) can be levied when the issue is a debatable one. Your Honours, kind attention is invited to the decision of the Hon'ble Supreme Court in thecae of CIT vs. Reliance Petroproducts (322 ITR 158) in which it was held as under ....
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....nder a bona fide belief that it is eligible for deduction u/s 80-IA of the Act and the same is evident from the conduct of the assessee, who has not filed appeal before the CIT(A) against quantum additions. From the above write up given by the assessee, it is evident that the assessee would have won the appeal on quantum additions if were to file. Therefore, the attaining finality on the quantum additions against the assessee is no issue for confirming the penalties. As such there exists dispute on the debatable nature of the said provisions. As per the judgment of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. (322 ITR 158), it is a settled law that no penalty should be levied when the issue is a debatabl....