TaxTMI 
TaxTMI 
2016 (1) TMI 399
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....laimed deduction u/s 80 P of the Income Tax act of Rs. 3,36,68,582/-. The assessee company was eligible for deduction u/s 80 P up to AY 2006-07 but due to amendment wef 1-4-2007 subsection 4 was introduced u/s 80 P of the act which restricted the deduction only to Primary Agricultural Credit society and Primary cooperative Agricultural and Rural Development bank, therefore apparently assessee was not eligible for deduction u/s 80 P of the act for impugned assessment year. Hence, AO issued show cause notice on 3.11.2009 to the assessee for disallowance of deduction u/s 80 P and in turn assessee withdrew the claim of the deduction u/s 80 P and furnished revised statement of income. Thereafter AO passed assessment order u/s 143(3) of the act a....
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....n part of the assessee. He submitted that letter dated 20/11/2009 and 15.12.2009 explains the position about the bona fide of the assessee. b. Assessee claimed deduction u/s 80 P (2) of the Act for AY 2007-08 and 2008-09. On coming to know the error that this deduction is not available to the assessee, assessee withdrew the deductions for both the year. Penalty proceedings were initiated in both the years. In this assessment year penalty u/s 271 (1) ( c) was levied where in for AY 2008-09, AO himself has dropped the penalty proceedings holding that explanation of the assessee is found to be bonafide applying the ratio of decision of Honorable Supreme court in case of CIT V Reliance Petro Products Limited. However for AY 2007-08 on identica....
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....d for imposition of penalty u/s 271(1)(c) of the Act. The assessee has been making similar claim and the same were being allowed in earlier assessment years. Due to change in law, this claim was not allowed and the assessee also corrected its mistake by withdrawing the claim, therefore it is not a case of willful wrong claim. More importantly we were invited to the assessment order dated 30.8.2010 for AY 2008-09 in which on identical facts assessee claimed the deduction and later on pointing out the error of unavailable claim of deduction u/s 80 P withdrew same by filing revised return of income. In that case after issue of show cause notice and pursuing the reply of the assessee, AO himself dropped the penalty proceedings u/s 271 (1) (c) o....
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....re the assessee claimed deduction u/s 80P of the act for AY 2007-08 and withdrew the same on pointed out by AO by filing revised return of income. Honorable High court held that "In our view, the submissions of the Revenue fall short of making out a substantial question of law worth consideration. The assessee is a Co-operative Bank and had been entitled to the deduction under Section 80P(2)of the Act before the year in question and had been allowed such deduction. It is no doubt true that in the original return for the year in question, the assessee claimed deduction of Rs. 50,000/- underSection 80P(2)(c)(ii)of the Act and in the revised return dated 13.12.2007, besides the above, the assessee also claimed deduction of Rs. 3,07,37,988....