TaxTMI 
TaxTMI 
2026 (8) TMI 1111
X X X X Extracts X X X X
X X X X Extracts X X X X
....ide order dated 18th September, 2009 for consideration of the following substantial question of law : "Whether the Appellate Tribunal is right in law and on fact in reversing the order of the CIT(A) & thereby cancelling the penalty levied u/s. 271(1)(c) amounting to Rs. 10,26,28,624/- though the assessee has concealed the particulars of its income?" 3. The brief facts of the case are as under : 3.1. The assessee filed Return of Income for Assessment Year 2001-02 on 30th October, 2001 declaring total income at Rs. NIL. 3.2. The Assessing Officer passed Assessment Order on 26th March, 2004 under Section 143(3) of the Income Tax Act, 1961 (for short 'the Act') determining the total income of the assessee at Rs. 8,49,15,110/-b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e CIT (Appeals), deleting the disallowance of deduction under Sections 80HHC and 80IA of the Act. The Tribunal also confirmed the addition of Rs.8.49 Crores of disallowance under Sections 80IA and 80IB of the Act on captive plant/PAA plant. 3.6. Being aggrieved by the confirmation of levy of penalty by the CIT (Appeals), the assessee preferred an Appeal before the Tribunal. The Tribunal, after considering the fact that the assessee discharged his onus and rebutted the presumption available to the Revenue under Explanation 1 to Section 271(1)(c) of the Act, deleted the penalty imposed upon the assessee, by observing as under: "5. We have also gone through the case laws as relied on before us, As per the provisions of section 271(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Explanation 1 to section 271(1)(c). 6. In the case of National Textiles v CIT 249 ITR 125 (Guj) the question before the Hon'ble Gujarat High 'Court was about the levy of penalty u/s 271(1)(c) in respect of the addition made u/s 68 by recourse to Explanation 1 below section 271(1)(c). In this case the Hon'ble Gujarat High Court while holding the imposition of penalty was not justified observed:- "In order to justify the levy of penalty, two factors must coexist, (i) there must be some material or circumstances leading to the reasonable conclusion that the amount does represent the assessee's income. It is not enough for the purpose of penalty that the amount has been assessed as income, and (i) the circumstances must show t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the case before us and support the contentions of the assessee. The assessee has, while claiming the depreciation, has given a detailed note in the return and accordingly computed the deduction u/s 80IA and 80IB. There is no doubt that the matter about the claim of depreciation was highly debatable and the different Benches have taken a different view before the matter was finally decided by the Special Bench of ITAT. There we cannot say that non-claiming the depreciation by the assessee was not bona fide. The assessee, in our opinion, has duly discharged its onus and the explanation given by the assessee is a plausible explanation which cannot be regarded not to be a mala fide one. In view of this, we are of the view that it i....