2019 (2) TMI 1373

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....e DR. We decide to proceed exparte. The DR was heard at length. The DR strongly stated that Mens REA is no more an essential condition for the levy of penalty u/s 271 (1) (c) of the Act. It is the say of the DR that the assessee has claimed deduction u/s 80 IA and 80 HHC of the Act simultaneously which was denied by the Assessing officer while completing the assessment u/s 143 (3) of the Act. The DR further stated that the assessee had intentionally claimed simultaneous deduction and, therefore, levy of penalty is justifiable. The DR placed reliance on the judgment of the Hon'ble Delhi High Court in the case of Zoom Communications Private Limited in ITA No.07/2010. 4. We have carefully perused the orders of the authorities below. In this c....

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....t Rs. 85,13,868/-. 8. The assessee carried the matter before the CIT(A) and strongly contended that it has not claimed simultaneous deduction intentionally and therefore, it is not a fit case for levy of penalty. Strong reliance was placed on the judgment of Hon'ble Supreme Court in the case of Reliance Petro Projects Private Limited reported in 322 ITR 158. After considering the facts and the submission and drawing support from various judicial decision the CIT(A) deleted the penalty so levied. The relevant findings of the CIT (A) read as under :- "In the case under consideration. It is an undisputed fact that the issue of simultaneous claim of deductions u/s 80 HHC and 80 IA was a debatable issue. In the case of ACIT Vs. Rogini Garment....

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....7CTR, 408 held that the amount of deduction u/s 80IA is not to be reduced in computing the exports profit for the purpose of deduction u/s 80HHC. Thus, there was divergence of decisions on the issue of simultaneous claim of deduction u/s 80HHC and 80IA and the issue was a debatable issue involving substantial question of law. Therefore, in my opinion, penalty u/s 271(1)(c) is not leviable in this case. Reliance in this regard is also placed on the decision of Hon'ble ITAT Ahmadabad in the case of DCIT vs. Ornet Intermediates Pvt. Ltd. (ITA No.477 and 478/AHD/2007) wherein it was held that penalty u/s 271(1)(c) is not leviable in the case of debatable issue. 9. A perusal of the above clearly shows that the claim of the assessee is a highl....