TaxTMI 
TaxTMI 
2015 (12) TMI 453
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....time when facts of the case point out the claim made was not bonafide even if legal position at the time of filing return of income is taken into consideration. 2. The appellant prays that the order of Commissioner of Income-tax (Appeal) on the above ground be set aside and that of the Assessing Officer be restored. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary." 2. The brief facts are that from the computation of total income, the A.O. observed that the assessee had claimed deduction u/s 80IA(4) of the Income Tax Act, 1961. However, from the details filed by the assessee the A.O. had noticed that the assessee was a sub-contractor, undertaking projects of road constructions on behalf of two main contractors i.e. M/s. Larsen & Toubro Limited for National Highway Authority of India One project at Orissa and M/s. Ashok Buildcom Limited for project at L.B.S. Marg, Mumbai, As per the AO, since the Act did not provide for deduction in the case of sub-contractor on Infrastructure projects, the claim of the assessee was disallowed by him. Further, the assessee itself filed a revised computation of income during the course of asses....
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....hen the matter lacks clarity and the appellant makes a possible claim, it could not be said that the appellant had concealed the particulars of its income or filed inaccurate particulars thereof. If such a view is taken, in all the cases wherein there are two possible views, and an assessee takes one possible view which is not finally upheld, penalty under section 271(1)(c) would be imposed. This could never be the intention of the legislature. The appellant submits that the Notice which was issue for scrutiny assessment, only included a general query requiring the appellant to justify its claim for deduction under section 80-IA without giving any specific reason or details The appellant considering the retrospective amendment suo moto filed a revised computation of total income withdrawing its claim for deduction under section 80-IA. The appellant submits that even while completing the assessment, the only reason for disallowance of claim for deduction under section 80-IA(4) is the retrospective amendment to the said provisions and relied on the following decisions: CIT V. Hindustan Electro Graphites Ltd. [( 2000) 243 ITR 48 (SC) ] Dilip N. Shroff V. Joint Commissioner of....
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....ng from actual diarrhea and was not in position to come and attend penalty proceedings before the Assessing Officer. In that case, the Representative or the assessee should have informed this fact to the Assessing Officer. But, this was not done and the reason cited by it before your honour is an afterthought. Even during the recovery proceedings also, the assessee has not informed this fact to the Assessing Officer. The assessee furnished inaccurate particulars regarding the claim of deduction u/s. 80IA and remained intentionally silent till the same was unearthed by the Assessing Officer." 2.3. Thereafter, Ld. CIT(A) provided copy of remand report to the Assessee. In response to the remand report, detailed rejoinder was filed by the assessee, wherein, inter alia, it was reiterated that the assessee has filed the return of income on 29.11.2006 i.e. much before the amendment was made by the Finance Act, 2007, and relying upon the decision of Hon'ble Mumbai bench of ITAT, in the case of Bharat Udyog Ltd., supra. The assessee also relied upon the decision of the Hon'ble Supreme Court in the case of CIT vs Hindustan Electro Graphite Ltd. 243 ITR 48, where it was held as ....
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.... the decision of Mumbai bench of ITAT in the case of ACIT vs Bharat Udyog Ltd 123 TTJ 689 (Mum), wherein it was held that an assessee having entered into an agreement with the Government agency for developing of its projects is obviously a contract that does not derogate that assessee from being a developer and claim for deduction u/s 80lA(4) by the said assessee, cannot be denied. Thus, in our considered view, it can certainly be said that claim made by the assessee at the time of filing of return was a bonafide claim and based upon one of the possible views, as per law prevailing at the time of filing of return. With the objective of bringing its return in line with the amended law, as per the amendment made in section 80IA(4), the assessee had filed its revised computation of income during the course of assessment proceedings, withdrawing the claim of deduction u/s. 80-IA. Under these circumstances, the A.O. had held that the assesse had furnished inaccurate particulars of income by claiming deduction u/s 80-lA(4), and thereby concealed its income, and thus penalty was levied. In our considered view, it was neither a case of furnishing of inaccurate particulars of income nor tha....